Exchange rate risk:

Exchange rate risk:
a.arises from the fact that the spot exchange rate on a future date is a random variable.
b.applies only to certain types of international businesses.
c.has been phased out due to recent international legislation.
d.both a and b.









Use the following information to answer questions 46-47. Below is an excerpt from Table 22-1, The Globalization of Product and Financial Markets, that appears in your text. Values are foreign exchange rates reported in The Wall Street Journal.
U.S. $ equivalent  Currency per U.S. $
          Country              Mon.                    Mon.
          India (Rupee)        0.03137                  31.88
          Britain (Pound)      1.5615
          30-day Forward    1.5609
          90-day Forward    1.5605
          180-day Forward  1.5603
          Canada (Dollar)    0.7265                      1.3765
          30-day Forward    0.7256                    1.3782
          90-day Forward    0.7236                   1.3820
          180-day Forward0.7196                      1.3896
          Sweden (Koruna)  0.18848                    5.3055
          30-day Forward    0.18829                    5.3110
          90-day Forward    0.18809                    5.3167
          180-day Forward  0.187955.3205

 

Solution