Explain how the sports exports company is exposed

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Reference no: EM132211924

Question - Each month the Sports Exports Company (US Firm) receives an order for footballs from a British Sporting goods distributer. The monthly payment for football is be nominated in British Pound as requested by the British distributor. Jim owner of the Sports Exports Company must convert the Pounds received into Dollars.

1) Explain how the Sports Exports Company could utilize the Spot market to facilitate the exchange of currencies?

2) Explain how the Sports Exports Company is exposed to exchange the rate risk and how it could use the Foreign market?

Reference no: EM132211924

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