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I would like help on this exposure question please. Thank you! Comparing Exposures Erie Co., a U.S. based firm, has most of its business in
I would like help on this exposure question please. Thank you!
Comparing Exposures Erie Co., a U.S. based firm, has most of its business in the United States, except that it exports to Belgium. Its exports have been invoiced in euros (Belgium's currency). It has no foreign subsidiaries. Its main competition when selling to Belgium's customers is a company in Belgium that sells similar products, denominated in euros. Is Erie Co. subject to transaction exposure, translation exposure, and economic exposure? Starting today, Eire plans to adjust its pricing strategy to invoice its exports in U.S. dollars instead of euros. Based on the new strategy, how will Erie's exposures to exchange rate risk change? Will Erie Co. be subject to economic exposure to exchange rate risk in the future? Briefly explain. (1 point) Step by Step Solution
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