Mr. Swanson has expressed confusion about how foreign exchange rates will affect Content Cow Dairy if it expands to international markets. You tell Mr. Swanson that he has raised a good question and that you will draft and send him a report with information on this topic.
In your report, include the following:
- Compare/contrast therisks and benefits of pricing goods in U.S. dollars or pricing goods in local currencywhen selling in a foreign market.
- Explain rate parity theory and how it is used to predict future exchange rates.
- Calculate the current Forward Exchange Rate for the United Statesand Egypt. (Show your calculations).
- Explain the relationship between monetary policy, interest rates, and exchange rates.
- Briefly introduce other factors that influence exchange rate fluctuations. Address whether any of these are a factor when looking at the future exchange rate between the United Statesand Egypt.
- Cite all resources using APA format.
- (Optional: Youmay choose to insert graphics, tables, or images if you think they will help convey the information to Mr. Swanson).