Assume a U

question 74

Multiple Choice

Assume a U.S. exporter sells to a British importer and denominates the sale in dollars. If the dollar rises over time against the British pound,what types of economic exposure and/or possible strategies could the exporter or importer face?

• A) The U.S. exporter has no economic risk because the sale is denominated in dollars.
• B) The British importer has only economic risk if the dollar falls against the pound.
• C) The U.S. exporter could lower prices in order to reduce the cost to the importer and thereby keep up sales volume.
• D) The U.S. exporter does not face an economic exposure, but the British importer does because it must pay in dollars.

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Definitions:

Review Panel

A group of experts that evaluates proposals, submissions, or projects, often in academic, governmental, or professional contexts, to ensure standards are met.

Maturity Stage

A phase in the product life cycle where sales growth slows or levels off after a period of rapid expansion.

Product Life Cycle

Refers to the stages a product goes through from introduction to growth, maturity, and decline in the market.

Buyer Sophistication

The level of awareness, knowledge, and discernment among consumers regarding the quality, features, and pricing of products or services.