This is “End-of-Chapter Questions and Exercises”, section 7.5 from the book Challenges and Opportunities in International Business (v. 1.0). For details on it (including licensing), click here.
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These exercises are designed to ensure that the knowledge you gain from this book about international business meets the learning standards set out by the international Association to Advance Collegiate Schools of Business (AACSB International).Association to Advance Collegiate Schools of Business website, accessed January 26, 2010, http://www.aacsb.edu. AACSB is the premier accrediting agency of collegiate business schools and accounting programs worldwide. It expects that you will gain knowledge in the areas of communication, ethical reasoning, analytical skills, use of information technology, multiculturalism and diversity, and reflective thinking.
(AACSB: Communication, Use of Information Technology, Analytical Skills)
You work for a global auto-parts company. Describe how you would use the spot and forward markets to manage the potential exchange rate risk between the countries from which you import (buy) components and the countries in which you sell auto parts. Select any three currencies to use in your discussion.
Access the following URL from fxstreet.com: http://www.fxstreet.com/rates-charts/forward-rates. Use it to determine if forward or futures contracts are available in all the currencies you selected.
(AACSB: Ethical Reasoning, Multiculturalism, Reflective Thinking, Analytical Skills)