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Write notes on the exchange rate risks

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Question - Bluster Ltd is a manufacturing company based in the UK. Currently, all sales are priced in Sterling and all components and labour are sourced in the UK. Various business and market developments are being discussed at the next Board meeting and you have been asked to comment on the exchange rate risks that could arise in each case.

Required -

Write notes on the exchange rate risks that could result from each of the following developments, considering each one separately:

- Issuing an annual Euro price list to customers in Continental Europe.

- Increased competition in the US market from a US-based competitor.

- Plans to relocate 50% of the present manufacturing capacity to Italy.

Reference no: EM132937682

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