stmicro - h c i crelgn E rchang: l '.cfw_arket Chapter 9...

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hc icrelgn Erchang: l'.{arket Kwg*ms*&x ffmsk {3 gtouatrmsr hqjrrtd, ..;"d, Use the globalEDGE'M sire to complere the followine exercises: 1. One component of learning about another coun- try or region is to understand the reiationship of its currency with others on the world currency mar- ket. As such, you are assigned the duty of ensuring the availability of i00,000 yen for a paymenr scheduled for next month. Considering that your company possesses only U.S. dollars, identifu the spot and forward exchange rates. What are the factors that influence your decision to use the snot or forward exchange rate? Which one would vou choose? How many doilars must vou spend to acquire the amounr of yen requiredl Z. Sometimes, analysrs use the price of specific products across locatlons to compare currency vaiuation and purchasing power, In fact, the Bie Mac fndex compares the purchasi.g-por"., pur- rty ot many countries based on the price of a Big Mac. Locare the latest edition of this index thai is accessible. Identify the five counrries (and the currencies) with the lowest purchasing-power parity according to this classification. Which currencies, if any, are overvalued? Chapter 9 349 ?he *alns* *f tlte $€r**g Saltar at STMicre Europe's STMicro is the world's sixth-largest manufacturer of semiconducror chips, with sales of nearly $9 billion. The company makes chips for mobile phones, prlnrers, and cars, among other things. It counts Nolia, the world's largest maker of wireless handsets, among lrs customers. Formed in 1987 from a merger bet*een an Italian firm and a French firm, the mayorrry of STMicro,s operations have long been in Western Europe. During the early 2000s, when the dollar was strong agalnst the euro, the currency adopted by 12 member states of the European Union, this location worked in STMicro's favor. Some 70 percent of the company's cosrs were denominated in Europe while semiconductors.
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This note was uploaded on 12/31/2009 for the course BIZ 178 taught by Professor Meford during the Fall '09 term at University of California, Berkeley.

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stmicro - h c i crelgn E rchang: l '.cfw_arket Chapter 9...

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