Question
ABC Co. has most of its business in the United States, except that it exports to Greece. Its exports were invoiced in euros (Greece's currency)
ABC Co. has most of its business in the United States, except that it exports to Greece. Its exports were invoiced in euros (Greece's currency) last year. It has no other economic exposure to exchange rate risk. Its main competition when selling to Greece's customers is a company in Greece that sells similar products, denominated in euros. Starting today, it plans to adjust its pricing strategy to invoice its exports in U.S. dollars instead of euros. Based on the new strategy, will ABC Co.be subject to economic exposure to exchange rate risk in the future? Discuss broadly.
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