You have decided to set up an export business. You will be exporting handmade furniture to Great Britain. The importer has agreed to pay you in British Pounds. For your first shipment of beds, the importer will pay you British Pounds 50,000. How much will you make in US dollars?
Referring to the question above, suppose you are not paid immediately. Instead, the importer agrees to pay in 60 days. Choose the best option below:
A. You face the risk that the British Pound will strengthen against the US dollar over the 60 days.
B. You face the risk that the US dollar will strengthen against the British Pound over the 60 days.
C. You face the risk that the British Pound will strengthen against the Euro over the 60 days.
D. You face the risk that your furniture will be cheaper after 60 days.
You will make $65,182.42. B. You face the risk... View the full answer