You manufacture wine goblets.In mid June you receive an order for 10,000 goblets

from Japan.Payment of 400,000 is due in mid December.You expect the yen to

rise from its present rate of $1=130 to $1=100 by December.You can borrow

yen at 6% per annum.What should you do?

You are CFO of a U.S. firm whose wholly owned subsidiary in Mexico manufactures

component parts for your U.S. assembly operations.The subsidiary has been

financed by bank borrowings in the United States.One of your analysts told you

that the Mexican peso is expected to depreciate by 30 percent against the dollar on

the foreign exchange markets over the next year.What actions, if any, should you

take?