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You import fine china from China, which you buy in yuan and sell in U.S. dollars. Your profits: remain the same under all circuinstancey decrease
You import fine china from China, which you buy in yuan and sell in U.S. dollars. Your profits: remain the same under all circuinstancey decrease if the dollar strengthens incresse if the dollar strehethan Ahab Coffee has all of its costs in Columbian pesos and sells all of its coffee in the United States. It competes in the U.S. with Ishmael Coffee with costs in Swedish kroner and its sales in dollars. Which of the following statements is true? The pesio-kroner exchinge rate doss not matten to hhab Coffees business model The peso-kroner exchange rate represents translation exposure to Ahab Coffoc A Chinese boat maker exports boats to U.S.-based distributors. The Chinese company makes less money on these sales decline when the Chinese currency (the yuan) is strong vs. the USD. The manufacturer could reduce its economic exposure by: Reducing the cost of the boat in USD Hedeging the USD ywan exchange rate Producing the boats in Mexico with peso-based suppliers Laurel Co. is a U.S.-based company with US dollar costs and with revenues in euros and Swiss francs. Assume that the euro-franc exchange rate will remain quite stable. Hardy Co. is also U.S.-based, but has euro revenues and costs in Swiss francs, rather than in USD. Which firm has a higher exposure to exchange rate risk Hardy Neither firm has exchange rate risk Laurel The tirmis have the surne ievels of exposure
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