Foreign currency exchange market important to business

Assignment Help Business Economics

Reference no: EM131088711

Foreign exchange markets make it possible for trade to be enacted between countries without lengthy negotiations on trade terms. The exchange rate mechanism is a relatively stable process whereby different currencies can be exchanged in an orderly manner in conformity to the rules of currency exchange rates. Factors, such as the relative inflation and unemployment rates between the trading partners, affect the value of each country’s currency in relation to the other countries' currency. The country with higher inflation and unemployment will have the lower valued currency.

(A) Why is the foreign currency exchange market important to a business?

(B) What is the benefit of the foreign currency exchange market to the U.S. company?

(C) If the U.S. currency is decreasing versus other currencies of countries it trades with, how will that affect the U.S. company? If the reverse is true, how will that affect the US company?

Reference no: EM131088711

Questions Cloud

Measuring returns-risk assessment and analysis and valuation : The focus of this assignment is on risk, return and equity analysis. The expectation is that students will develop skills in measuring returns, risk assessment and analysis and valuation. Students are required to use the data provided in the case ..

Formulate the interconnection function for the omega network : Formulate the interconnection function for the Omega network

Develop more effective integrated marketing communications : Think of a recent high dollar purchase you have made (Television, computer, car, etc.). Using the 5 steps outlines in the consumer purchasing process, explain each step of the process as it applies to your purchase. Which 2 steps did you find most im..

Governments build highways and provide medical care : Governments build highways and provide medical care, welfare, border security, schools and education. If the market is such an efficient and beneficial mechanism, why isn’t it universally relied on? Explain

Foreign currency exchange market important to business : Foreign exchange markets make it possible for trade to be enacted between countries without lengthy negotiations on trade terms. The exchange rate mechanism is a relatively stable process whereby different currencies can be exchanged in an orderly ma..

Did you go to preschool or day care when you were younger : What do you think are the different kinds of child care settings available to infants and very young children? Which of these do you think is the most beneficial for the parents and the children? Why?

What do you define as management : What do you define as management - What are good qualities of a manager and Do the qualities change based on different situations

How multiculturalism and diversity impacts social problem : Discuss how multiculturalism and diversity impacts the social problem you suggested. Be sure to include what influences that social problem in both countries.

Question regarding the certificates of deposit : What includes all of M1 money supply plus most savings accounts, money market accounts, and certificates of deposit?

User Account

All Pages