Explain how you will manage each of these situations. The major export markets of your company have suffered a substantial depreciation in their currency rates compared to the AUD.
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Explain how you will manage each of these situations.
The major export markets of your company have suffered a substantial depreciation in
their currency rates compared to the AUD.
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Solved in 2 steps
- A shift to expecting depreciation in the domestic currency will lead to: a. an inflow of capital to domestic economy b. an increase in the demand for domestic country currency- denominated financial assets c. uncovered interest parity d. a decrease in the demand for domestic country currency denominated financial assetsAn increase in which factor will cause domestic currency depreciation? O relative productivity O import demand O export demand O No answer text provided.An example of transaction exposure is when Question 4 options: companies have obligations for the purchase of goods at previously agreed prices. companies borrow funds in domestic currency. there is an impact of currency exchange rate changes on the reported financial statements of a company. there is a long-term effect of changes in exchange rates. changing exchange rates persists on future prices, sales, and costs
- An exporter is trying to reduce transaction exposure in the face of a depreciating foreign currency, which of the following strategies would be best? A) Paying or collecting early B) Paying or collecting late C) Paying bate, collecting early. D) Paying early, collecting lateExplain how you will manage each of these situations. ) Crude oil prices reduce substantially due to lower global demand. Your company is an importer of foreign crude oil. The imports are denominated in USD which has appreciated with respect to the AUD.Following an unanticipated dollar appreciation, would you recommend that a domestic manufacturing company such as Cummins Engine sell foreign assets? Yes or No
- Suppose America experiences a negative balance on goods and services (imports higher than exports.) If the exchange rate decreases, then a . imports will be expensive. b . goods and services balance will remain unchanged. c . deficit on goods and services will be reduced d . deficit on goods and services will increase e . None of the answers is correctIf a U.S.-based MNC focused completely on exporting, then its valuation would likely be adversely affected if most currencies were expected to appreciate against the dollar over time. Group of answer choices True FalseAlthough we stated that real assets constitute the true productive capacity of an economy, it is hard to conceive of a modern economy without well-developed financial markets and security types. How would the productive capacity of the U.S. economy be affected if there were no markets in which to trade financial assets?
- When a country's currency depreciates against the currencies of major trading partners: O a. The country's exports tend to fall and imports rise. O b. The country's exports tend to rise and imports fall. c. The country's exports tend to rise and imports rise. O d. The country's exports tend to fall and imports fall.When the value of a currency rises due to demand and supply factors, is it correct to say that the currency has undergone revaluation? Explain briefly.Consider a US-based MNC with a wholly owned Italian subsidiary. Following a depreciation of the dollar against the euro, which of the following conclusions are correct? Group of answer choices a. The cash flow in euros could be altered due a change in the firm's competitive position in the marketplace. b. A given operating cash flow in euros will be converted to a higher US dollar cash flow. c. Both A and B d. None of the above