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Racoon-Ripper, a Singaporean company, manufactures racoon-traps in Singapore, incurs all costs in Singapore dollar (SGD), and sells its racoon-traps in a little shop in Austin
Racoon-Ripper, a Singaporean company, manufactures racoon-traps in Singapore, incurs all costs in Singapore dollar (SGD), and sells its racoon-traps in a little shop in Austin Texas and collects USD. It reports its yearly financial performance in Singapore dollar (SGD). Assume that Racoon-Ripper has not hedged (protected) itself against any currency movements. Which of the following will reduce Racoon-Ripper's profits in SGD? A) SGD appreciates (increases in value) against the US dollar, due to a Singaporean central bank intervention involving aggressive SGD-buying in the currency market. B) US dollar appreciates (increases in value) against all other currencies in the world, as a result of increasing US interest rates. C) SGD depreciates (decreases in value) against all other currencies in the world, as a result of a massive loss of confidence in the Singaporean political system. D) A massive heatwave and drought in Austin forced thousands of racoons to overrun the city and take over residential swimming pools, causing massive panic and hysteria among Texans in Austin
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