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During an appreciation of home currencies, exporters face two choices. Identify and explain those choices with Example
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- Can companies take advantage of favorable exchange or tax rates to make purchases in different currencies/countries? If yes, how and why?Select an area of the world upon which to focus your attention. For each major country of your selected area (like Canada, Mexico, Brazil, Argentina, Japan, China, India, Australia, Singapore, Hong Kong, South Korea, Russia, Germany, France, Italy, United Kingdom, Ireland, Spain, France, Switzerland, Sweden, Denmark, Finland, Saudi Arabia, Israel—), identify the currency in use in the country, show what the foreign currency is now selling for versus the U.S. dollar, and explain whether it has weakened or strengthened against the U.S. dollar for the current period and from 5 years ago. Finally, discuss why the currency has strengthened or weakened versus the U.S. dollar during these time periods.Explain the differences between each of the following and give examples a)domestic market and foreign market b)national market and euromarkets
- Methods of entering a foreign market, including the advantages and disadvantages of each.(a) Explain the following terms which are used in the foreign exchange market:(i) Value “Tom” and value “Tod”; (ii) Direct quotation and indirect quotation.Identify a product that would be interested in importing and selling here in the U.S. What is the pros and cons of using any two methods of payment to settle the transaction with the overseas supplier of the product Importing and selling here in U.S.?
- (i) In what circumstances should the method of translating into the functional currency(the temporal method)be used? discuss two advantages and two disadvantages of translating into the functional currency(the temporal method). Your answer should not be more than 210 words. (ii) How does the method of translating into the functional currency(the temporal method) differ from the method of translating into the presentation currency(the closing rate method)? Your answer should not be more than 90 words.What are the financial issues, export practicalities and technicalities that an exporter would need to know about to in the context of developing an export strategy?Let i be home interest rates, i* a foreign interest rates and p be the forward foreign exchange premium (=F/S-1). Assume there is a transaction cost equal to C incurred in any covered interest rate arbitrage. Write down the relation by which incentives are present for money to move from the foreign country to home.
- Conduct research on a real-world retailers trade discounts and policies, and discuss the following questions. Which company did you choose? What do they sell? What is a trade discount? What products are subject to a trade discount? Describe the discount terms/program in detail. Give examples. Are there any restrictions? What incentive does this company have to give a trade discount? How does this discount benefit the buyer? If the buyer had to choose between receiving a trade discount or regular cash purchase discount, which would benefit them more? Why?Ifyouare in Vietnam, please quote direct and indirect rate from Tha i Baht for Cash and both Buying & Selling.Question Which of the following is a determinant of exchange rates? Answer a. A change in consumer preferences b. A change in productivity c. A change in real interest rates d. all of these
