1. Your company wants to trade in foreign currency to build its portfolio. It is a European company and currently holds most of its value in the Euro. Visit OANDA's Currency Converter and compare the exchange rates of various currencies, including the dollar, euro, yen, and renminbi. What is the rate for these currencies today with respect to the Euro? What was the euro-dollar exchange rates one year ago? What factors might have caused the fluctuation in this rate during the year? Develop a 4-6 slide presentation that outlines your findings and makes recommendations to your company about the best currency in which to invest.
2. Read the news article "Exchange Rate Restrictions Lifted in Interbank Market" and discuss on the following questions.
- Why did Belarus decide to abolish the currency trading restriction?
- What is the effect of this change on the investment of multinational firms in Belarus?
Please see the attachment.
Belarus has decided to abolish currency trading restrictions so that the country's exchange market is restored to normal operation and transparency is increased of how currency exchanges rates are set. According to Belarus, market participants are feeling uncertain regarding the problems in the domestic market and the exchange rates in different segments of the exchange ...
Foreign currency rate fluctuation is explained in a structured manner in this response. The answer includes references used.
Effect of the exchange rate fluctuations on reported income for Benjamin Inc
Benjamin, Inc. operates an export/import business. The company has considerable dealings with companies in the country of Camerrand. The denomination of all transaction with these companies is alaries (AL), the camerrand currency. During 2011, Benjamin acquires 20,000 widgets at a price of 8 alaries per widget. It will pay for them when it sells them. Currency exchange rates for 1 AL are as follows:
Setember 1, 2011 .46
December 1, 2011 .44
December 31, 2011 .48
March 1, 2012 .45
A. Assume that Benjamin acquired the widgets on December 1, 2011, and made payment on March 1, 2012. What is the effect of the exchange rate fluctuations on reported income in 2011 and in 2012?
B. Assume that Benjamin acquired the widgets on September 1, 2011, and made payments on December 1, 2011. What is the effect of the exchange rate fluctuations on reported income in 2011?
C. Assume that Benjamin Acquired the widgets on September 1, 2011, and made payments on March 1, 2012. What is the effect of the exchange rate fluctuations on reported income in 2011 and in 2012?