Considering the importance of currency values when conducting international business outline how a business might predic...
Considering the importance of currency values when conducting international business outline how a business might predict exchange rate fluctuations and what you consider to be the most important way to protect your business from currency fluctuations.
Homework Answers
Currency values largely help international businesses offset risks and make sizeable profits using arbitrage opportunity.
Businesses predict exchanges rate fluctuations based on evaluation of monetary policy and import and export numbers as well as assessing the inflation regime as well as performance of the nation in macroeconomic terms.
To protect from wide fluctuations businesses often indulge in hedging contracts where two currencies are pegged to each other at fixed rate such that both benefit and have no effect on fluctuations and volatility of exchanges rate.
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and this activity will emphasize several of the most critical ones
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