Managing Economic and Transaction Exposure Simulation
A summary in which you address the following:
1. For each major phase, describe the situation, your recommended solutions, and results.
2. Summarize different global finance concepts addressed in the simulation by answering the following questions:
- What foreign exchange risk factors must be considered when making investments in another currency? What are appropriate techniques for mitigating these risks?
- How may one take advantage of currency fluctuations when making long-term loan decisions?
- Why is it important to evaluate political, social, and economic conditions of a country before investing in that country?
- How does hedging help limit an organization's transactional exposure?
- How does a currency swap help in limiting transactional exposure?