BU288 Lecture Notes - Lecture 1: North American Free Trade Agreement, The Foreign Exchange, Foreign Exchange Risk
Document Summary
Threats: much more competition because the consumers want lower prices - need to reduce costs creation of fortress? (10) the foreign exchange market. Function: convert the currency of one country into the currency of another . The sport exchange rate = the exchange rate at which dealer convert one currency into another currency on a particular day. Foreign exchange risk can be reduced by: using forward exchange rates = exchange rate governing future transactions, engaging in currency swaps = simultaneous purchase and sale of a given amount of foreign exchange for two different value date.
