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International Finance

E & J Gallo is the largest vintner in the United States. It gets its grapes in California (some of which it grows itself) and sells its wines throughout the United States. Does Gallo face currency risk? Why and how?

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ANSWER. E&J Gallo faces exchange risk because its wines are competing against foreign wines and changes in the value of the dollar affect its competitiveness. In the early 1980s, for example, ...

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