Question
Milan Fashion, an Italian company, purchases consulting services from Nielsen, a U.S. company, for a contract price to be paid in U.S. dollars when the
Milan Fashion, an Italian company, purchases consulting services from Nielsen, a U.S. company, for a contract price to be paid in U.S. dollars when the report is delivered three months later. How would Milan Fashion like to see the exchange rate move, assuming it isn't hedging the transaction.
A. It hopes that there is no change between the spot rate and the forward rate.
B. It hopes that the U.S. dollar appreciates in value against the Euro.
C. It makes no difference, since Milan Fashion is the customer and the sale takes place in Italy.
D. It hopes that the Euro appreciates in value against the U.S. dollar.
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