Postal Express has outlets throughout the world. It also keeps funds for transactions purposes in many foreign countries. Assume in 2010 it held 280,000 reals in Brazil worth 210,000 dollars. It drew 9 percent interest, but the Brazilian real declined 18 percent against the dollar. a. What is the value of its holdings, based on U.S. dollars, at year-end? (Do not round intermediate calculations.) b. What is the value of its holdings, based on U.S. dollars, at year-end if instead it drew 6 percent interest and the real went up by 10 percent against the dollar? (Do not round intermediate calculations.)

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Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.