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Author Question: What is exchange rate risk? Why would a multinational firm be concerned about it? What will be an ... (Read 58 times)

biggirl4568

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on: Jul 10, 2018
What is exchange rate risk? Why would a multinational firm be concerned about it?
 
  What will be an ideal response?

Question 2

You wish to deposit 7,000 in an account at the Shylock Bank. The bank pays interest at a nominal annual rate of 10 compounded quarterly. What is the future value in the account after seven years?
 
  A) 13,975.47
  B) 13,641.02
  C) 13,336.23
  D) 14,726.68
  E) 14,055.44


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CourtneyCNorton

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Exchange rate risk is the risk that the value of a firm's operations and investments will be adversely affected by
changes in exchange rates. For example, if U.S. dollars must be converted into euros before making an investment in
Germany, an adverse change in the value of the dollar with respect to the euro will affect the total gain or loss on the
investment when the money is converted back to dollars.

Answer to Question 2

A


biggirl4568

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Reply 2 on: Jul 10, 2018
YES! Correct, THANKS for helping me on my review

fatboyy09

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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