Assume That You Manage a Firm That Faces Transaction Exposure

question 40

Essay

Assume that you manage a firm that faces transaction exposure.Your company manufactures and sells scooters around the world.You just completed a large sale of scooters to a chain of stores in Sweden and received a promised payment of 1,000 krona per scooter.You have already sold 4,000 scooters and are now awaiting payment which you expect to receive in 90 days.The exchange rate today is 7.3 krona per dollar.Over the next ninety days,the indirect exchange rate unexpectedly moves from 7.3 to 7.6.What is the fall in domestic revenue due to this unexpected move in the exchange rate?

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Definitions:

Bayley-III

A comprehensive developmental assessment tool for young children, assessing cognitive, language, and motor skills.

Play Activity

Engagements and actions, often undertaken by children, that are driven by curiosity and imagination, primarily for enjoyment and leisure.

Poverty

A state of having insufficient financial resources to meet basic living expenses such as food, shelter, and clothing.

Cognitive Deficits

Refers to any kind of impairment in cognitive function, typically involving memory, attention, or problem-solving skills.