An Expected Change in Foreign Exchange Rates Is Not Included

question 26

Essay

An expected change in foreign exchange rates is not included in the definition of operating exposure, because both management and investors should have factored this information into their evaluation of anticipated operating results and market value. Describe how the expected change in foreign exchange rates would be reflected in the decision-making process from the perspective of a) management, b) debt service, c) the investor, and d) the broader macroeconomic perspective.

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Definitions:

Conclusions

Statements or judgments that are reached after consideration of facts, evidence, or reasoning.

Argumentation

The process of constructing, presenting, and defending arguments or positions on various topics.

Rhetoric

The art of effective or persuasive speaking or writing, especially the use of figures of speech and other compositional techniques to influence or appeal to an audience.

Conclusion Indicator

A word or phrase that signals the end of an argument or the summary of the main points.