Global Finance - foreign exchange, derivative markets and parity
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1. How does the existence of foreign exchange and/or derivative markets impact an organization's globalization strategies?
2. How do catastrophic world events affect the foreign exchange and derivative markets?
3. What are international parity conditions? What are some examples of international parity conditions? How do these conditions impact global business?
4. Explain the importance of cultural sensitivity and ethics in global finance.
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This solution discusses global finance in foreign exchange market.
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Global Finance: Foreign exchange and derivative markets
1. How does the existence of foreign exchange and/or derivative markets impact an organization's globalization strategies?
The existence of foreign exchange and derivative markets impacts an organizations globalization strategy. If a company is planning to go global but wants to protect itself from fluctuations in foreign exchange it can do so by hedging its position using forward contracts in foreign exchange. This helps it to get the expected price for its products, to supply goods at the contracted price and earn the profit anticipate,
The derivatives markets offer a wide variety of tools that can be used to reduce exchange related risks for a global organization. These tools help global organizations achieve their objectives, allow financial/exchange rate stability over ...
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