Hi, kindly find attached
Running Head: INTERNATIONAL BUSINESS - FOREIGN EXCHANGE MARKET
Foreign Exchange Market
Professor, Lyle E. Cady, Jr.
INTERNATIONAL BUSINESS - FOREIGN EXCHANGE MARKET
Requirement #1: Forward Exchange Rates
It will require a strategy such that it will help the business not to involve in the risk of
falling into paying off more than budgeted for. It is the wish and policy of every business to
spend less so as to maximize their profits. In this case, we will be required to make a forward
exchange rate arrangements with a financial organization such that we are given an exchange
rate which will remain for the six months. Considering that our business uses the US dollars to
make payment for supplies and the company we are dealing with is based in Japan and therefore
they prefer the Japanese Yen we will be needed to consider a better exchange rate that will last
for six months and that will see us spend fewer dollars. As per the policy of the company we are
going to make this payment in US dollars which will the exchanged by the bank to the Japanese
In choosing the currency that we will use it will also take some factors into consideration
which will involve, timing as one of the factors. It will be good for us to consider the timing of
sending the international payments in a particular currency. It will work well for us and as well
as the supplier if we reach out to the institutions that will transfer the money for us and get to
know how fast the local currency can reach the supplier versus the US dollars.
Another factor to consider will be t...