Which of the following illustrates noncontractual exchange-rate risk? A. A U.S. importer will owe £50,000 and the pound is expected to appreciate. B. A French airplane manufacturer has suppliers in the U.S. and the exchange rate has been unstable. C. A U.S. distributor of Japanese electronic goods expects the dollar to depreciate. D. A U.S. subsidiary of a German manufacturer transfers €100,000 to the parent annually.
Which of the following illustrates noncontractual exchange-rate risk? A. A U.S. importer will owe £50,000 and the pound is expected to appreciate. B. A French airplane manufacturer has suppliers in the U.S. and the exchange rate has been unstable. C. A U.S. distributor of Japanese electronic goods expects the dollar to depreciate. D. A U.S. subsidiary of a German manufacturer transfers €100,000 to the parent annually.
Chapter21: International Finance
Section: Chapter Questions
Problem 4QP
Related questions
Question
Which of the following illustrates noncontractual exchange-rate risk?
A. A U.S. importer will owe £50,000 and the pound is expected to appreciate.
B. A French airplane manufacturer has suppliers in the U.S. and the exchange rate has been unstable.
C. A U.S. distributor of Japanese electronic goods expects the dollar to
D. A U.S. subsidiary of a German manufacturer transfers €100,000 to the parent annually.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning