What basic functions does currency provide for all businesses, regardless of whether they are an international business or not? How does the foreign exchange market help to facilitate an international organization's basic use of currency?
Answer - No matter whether any currency is used domestically or internationally , it's basic functions remain the same. It provides the most important use of serving as the medium of exchange in every transaction. It serves the purpose of measuring any good or service in terms of money . These two functions help the business to function.
Through the foreign exchange rate , the effectiveness of the medium of exchange function of money increase. The business can trade internationally and measure the value or receive the payments as per the exchange rate prevailing in the country. Hence currency also serves the purpose of managing the foreign trade also efficiently.
What basic functions does currency provide for all businesses, regardless of whether they are an international...
Predicting Exchange Rate Movements Whether international businesses are concened with the long-term profitability of foreign investment, export opportunities, the price competitiveness of foreign imports, or the short-term foreign exchange transactions that occur on a daily basis, the firm must pay attention to exchange rate movements. These movements can affect whether a deal results in a profit or a loss Exchange rate movements are extremely difficult to predict, though businesses need some forecasting ability to plan. A number of theories, methods, and borrowings...
QUESTION 5 Select all that are true regarding investors and fx Currency forwards and futures can be used to mitigate fx risk for a foreign investment's "return trip" Currency swaps of two future dated exchanges can be used to make a foreign investment today Currency options can be used to hedge the risks of repatriating foreign investment returns. A properly hedged foreign investments will always have a higher total return than an uncovered foreign investment QUESTION 6 Select all that...
What strategic management challenges are faced by international businesses that have business units scattered around the world? How can a business strategy help improve a firm's ability to compete?
Briefly describe the current International Monetary System. How does the Current systems differ from the system that was in place prior to August 1971? Prior to 1971, the world operated on a fixed exchange rate system. The value of the U. S. Dollar link to gold at the fixed price of $35 per ounce and the values of other currencies then tied to the dollar. For example, in 1964, the British pound was fixed at $2.80 for 1 pound, with...
When incorporating, it is important to consider whether or not the company’s business deals internationally. 1. Summarize the impact of foreign exchange rates on the company’s financial statements. What risks do foreign exchange rates pose? 2. What are the two methods used to translate financial statements and how does the functional currency play a role in determining which method is used? 3. Compose a hypothetical example to demonstrate the translation process using the two methods. Ensure all information is entered...
F. When incorporating, it is important to consider whether or not the company’s business deals internationally. 1. Summarize the impact of foreign exchange rates on the company’s financial statements. What risks do foreign exchange rates pose? 2. What are the two methods used to translate financial statements and how does the functional currency play a role in determining which method is used?
1. what are the basic types of hedge transactions? how do they differ from each other? 2. what does "Net Settlement" mean? 3. Criticize the following statement: "Exchange losses arise from foreign import activities, and exchange gains arise from foreign export activities" 4. what are foreign currency commitments? why are they considered special? 5. explain the circumstances under which fair value hedge accounting should be used and when cash-flow hedge accounting should be used
This activity is focused on understanding what international business is, why and how it differs from domestic business, why it is important, and its historical development. International business is a broad and potentially complex field of study and practice. There are many different definitions and concepts that are critical to this field, and this activity will emphasize several of the most critical ones that are used throughout the text. Understanding these terms and concepts will help students, managers and policy...
What are some of the roles and functions of an international freight forwarder? How does a NVOCC differ from a traditional vessel-operating ocean carrier? Describe the organizational structure, and role of a shipping conference.
please provide explanation Summative Case 3 Foreign Currency fluctuations and Revenue Chikennella has considerable non-US operations. The Table below shows. Chikennella 2015 revenue by geographic segment along with related exchange rates at the beginning and end of the year. The exchange rates represent the foreign current equivalent of $1. USD exchange rate 01/01/15 12/31/15 Year ended December 31, 2015 ($ millions) Asia, other than China Europe China ..... Middle East.... Oceania .. Canada Africa - Latin America and Caribbean Total...