Topic:Business Global about currency exchange
Subject:Business
Volume: 2 pages
Type: questions and answer
Description
BUSINESS GLOBAL
Use the Global Edge website at (globaledge.msu.edu) to complete the following exercise:
1) One of your company’s essential suppliers is located in Japan. Your company needs to make a 1 million Japanese yen payment in six months. Considering that your company primarily operates in U.S. dollars, you are assigned the task of deciding on a strategy to minimize your transaction exposure. Identify the spot and forward exchange rates between the two currencies. What factors influence your decision to use each? Which one would you choose? How many dollars must you spend to acquire the amount of yen required?
