Author Question: The following is an example of Radio Shack hedging its foreign currency risk A) needing to pay ... (Read 117 times)

chads108 · **on:** Jun 30, 2018

The following is an example of Radio Shack hedging its foreign currency risk

A) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack makes a forward-exchange deal to buy yen.
B) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack makes a forward-exchange deal to sell yen.
C) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack buys yen at a spot-exchange 1 month from now.
D) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack sells yen at a spot-exchange 1 month from now.
E) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack sells yen in a forward-exchange deal.

Question 2

Intraindustry trade can lead to lower prices and job creation in both the exporting and the importing nation.

Indicate whether the statement is true or false