The exchange rate risk is the risk to which investors are exposed because changes in exchange rates may have an effect on investments that they have made. Because of the risk, an investor can lose capital in the currency trading market. Therefore, it important to hedge the currency risk.
What is the value of your $202,995 portfolio of your country's currency now?
Click here (https://www.oanda.com/currency/historical-rates/) and collect the following information: A.The daily currency values (how much currency you get for $1) for the last week,
The currency values for the last week of last year, and
The currency values for the last week of two years ago.
Based on your analysis and findings, what would you recommend to the American companies doing business in your chosen country? Should American companies doing business in your chosen country hedge their currency risk or not?