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    Please help with the following problems about international business risk.

    Midwestern Bank has lent $10 million to finance an equipment sale to Thailand by Lasertech, a major exporter located in Michigan. Both the loan and the sale are priced in U.S. dollars.

    a. Is Midwestern's loan to Lasertech exposed to exchange risk? Explain.

    b. Suppose Midwestern has lent money to Lasertech secured by the general credit of the company. Are these loans exposed to exchange risk? Explain.

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    https://brainmass.com/business/international-business-risk/international-finance-strategies-and-risks-175248

    Solution Preview

    Problem: Midwestern Bank has lent $10 million to finance an equipment sale to Thailand by Lasertech, a major exporter located in Michigan. Both the loan and the sale are priced in U.S. dollars.

    a. Is Midwestern's loan to Lasertech exposed to exchange risk? Explain.

    ANSWER. Yes. If the U.S. dollar appreciates against the Thai baht (which it has), the ...

    Solution Summary

    This posting provides a detailed solutions to the student's questions about international business strategies and risks. Issues discussed involved loans and the general credit of a company.

    $2.19

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