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Exchange rate changes

Discuss how exchange rate changes can affect companies' marketing, production, and financial decisions.

List the various factors one follows in an attempt to predict market F/X value. Include in your answer the types of questions that would apply to each factor.

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// In this paper, we are going to discuss that how exchange rate can affect the companies' marketing, production and financial decisions. To answer this question we have to analyze various factors which will affect the decision of the company at strategic level. //

When the foreign exchange market is highly volatile, the corporate managers have to be very careful and need to pay more attention on the management of foreign exchange risk. All the countries have their own currencies by which they are doing their business within the country and out side the country. If a company sells goods to the foreign company and it agrees to pay in its own currency but, the exporter company requests to receive the payment in its own currency, so in this condition the buyer will go to the bank and exchange its currency in exporter country's currency.

When the company takes the decision of production of any goods in the country and for that company imports any goods or services from other countries, then in that condition it needs to consider the cost of importing goods or services from that country as well as the difference between both the nation's currencies. If the exchange rate is highly ...

Solution Summary

The Response address the queries posted in 750 words with references.

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