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global finance

I need help with the following questions.
ABC, Inc. is a MNC based in the US. It has subsidiaries in Germany, Japan and Mexico. The subsidiaries sell consumer products on their local market and do their accounting using the local currency. The products they are selling are manufactured by ABC, Inc in the US, which, of course, does its accounting in USD.

1. Discuss the three types of exchange rate exposures for ABC, Inc. Explain how, for each of these three types of exposures, a depreciation of the USD against the local currencies could influence the earnings of the MNC.

2. What should ABC do if they expect the USD to keep depreciating against the Euro during the next two years?

3. What should ABC do if they expect the USD to appreciate against the Yen during the next two years?

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global finance questions

I need help with the following questions.
ABC, Inc. is a MNC based in the US. It has subsidiaries in Germany, Japan and Mexico. The subsidiaries sell consumer products on their local market and do their accounting using the local currency. The products they are selling are manufactured by ABC, Inc in the US, which, of course, does its accounting in USD.

1. Discuss the three types of exchange rate exposures for ABC, Inc. Explain how, for each of these three types of exposures, a depreciation of the USD against the local currencies could influence the earnings of the MNC.
The three types of exchange rate exposures are translational exposure, where there is a change in income and balance sheet because of changes in exchange rates, transactional exposure, where there is gain or loss because of the settlement of foreign exchange transactions, and economic exposure, where the value of ABC changes because of unanticipated change in the exchange rates.
If there is a ...

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