Ethics and Foreign Exchange. Rob Rheinhart, the controller for the German subsidiary of a U. S.-based firm, has noticed a consistent move in the exchange rate between the German mark and the Austrian shilling during certain holiday periods. He's not sure why this happens but thinks it is related to the large number of Germans who go to Austria to ski. He is aware that his company normally has about DM1,000,000 in its cash account. He decided to take advantage of this exchange rate movement during the Easter holiday week. His maneuver worked, and he made DM8,000.

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1. If Rheinhart did this to benefit his company, should he be rewarded or fired? Explain your answer.

2. If Rheinhart did this on his own behalf, comment on the possible risks.

3. How might the U. S. firm control this type of speculation?