Suppose you are the French representative of a company selling soap in Canada. Describe your foreign exchange risk and how you might hedge it with a money market hedge
What will be an ideal response?
As a French company, you are interested in euro profits. Selling soap in Canada will give you Canadian dollar revenues. The euro value of these Canadian dollar revenues will fall in value if the Canadian dollar weakens relative to the euro. To offset this loss in value, your company should borrow in Canadian dollars.
You might also like to view...
All of the following are elements of negligence EXCEPT
A) the ability to pay damages. B) the failure to perform a legal duty to use reasonable care. C) damage or injury to a claimant. D) proximate cause between the negligent act and the injury or harm that occurs.
Characteristics of testimonials would include:
A) little to no risk in using a celebrity. B) can be delivered by known or unknown people. C) about 80 percent of all TV spots feature a celebrity. D) athletes are rarely used. E) normally done utilizing voice-overs.