Chapter 20 questions - Chapter 20 Questions Ch. 20...

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Chapter 20 Questions Ch. 20 Questions CheckPoint: Ch. 20 Questions Alicia May Axia College of University of Phoenix 1
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Chapter 20 Questions Axia College Material Appendix D Chapter 20 Questions Answer each of the following questions. 1. Why is an exporter that is to be paid in six months in a foreign currency worried about fluctuating foreign exchange rates? An exporter may be worried because if there is a agreed upon amount that is to be paid for goods or services at a specific time like say six months and the value of the currency in the country to be exported to may loose its value and the exporter will loose money. 2. Are there ways in which this exporter can protect itself? If so, what are they? There are ways in which an exporter can protect its self. Hedging is a way this can be done, also a forward hedge, future hedge, currency options hedge, and money market hedge. 3. How does the credit or money market hedge work? Credit or money market hedge involves borrowing money. The company desiring a hedge is the borrower. The credit or money market hedge may be illustrated by
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Chapter 20 questions - Chapter 20 Questions Ch. 20...

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