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Consider the example from Question 1 in the Class Activity from 10/23/2020. To restate it: You are a discount retailer selling shoes that you import
Consider the example from Question 1 in the Class Activity from 10/23/2020. To restate it: You are a discount retailer selling shoes that you import from Vietnam (currency: Vietnamese Dong [VND]). They charge you 250,000 VND per shoe. The current exchange rate is 23,243 VND/$. Create a risk-sharing agreement between yourself and your supplier. The risk-sharing agreement should roughly split the risk in half for a movement in the exchange rate of 20% in either Direction.
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