See attached file.
(a) Assume role of a CFO of a mid-size company that exports to Europe. Your company received a contract to supply components to a German manufacturer. Discussed approaches to accurately forecast exchange rates. Identify implications exchange-rate company's marketing, production, financial decisions.
(b) Research a recent article on the international monetary Fund; perform a online search for an article. Read the article, and think about how the topic relates to the concepts discussed in Chapter 10(attached). Write a brief summary report(1page), and discuss how the article related to the IMF's position of influence on individual nation's economic policy. You should incorporate terminology and concepts included in the chapter to summarize the article. Cite sources used.© BrainMass Inc. brainmass.com October 25, 2018, 4:07 am ad1c9bdddf
a. Exchange rate forecasting is done in corporate and business setting by using econometric, judgmental and technical methods. The econometric method uses a single regression equation employing independent variables which are economic in nature and dependent variable which is the exchange rate. The determination of independent variables is prompted by economic theories such as purchasing power parity, monetary theory, portfolio balance theory, etc.
In the judgmental method, both quantitative variables like inflation rate, money supply and qualitative variables like changes in tax policy, overselling or underselling of currency are incorporated.
In technical analysis, past movements in exchange rate is used to determine future exchange rate. Other factors have no role in the determination of exchange ...
The solution discusses forecast exchange rate, based on an article on international monetary fund.
Global Foreign-Exchange Markets/ The Determination of Exchange Rates
1. As a CFO of a company that exports to Europe, the company has received a contract to supply components to a German manufacturer. What are various approaches available to help accurately forecast the exchange rates? What are some implications of exchange-rate changes on the company's marketing, production, and financial decisions?
2. Perform an online search for an article on the International Monetary Fund (IMF). Read the article, and think about how the topic relates to the concepts "The Determination of Exchange Rates".
Write a brief summary report (1 page), and discuss how the article relates to the IMF's position of influence on individual nation's economic policy.