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    Exchange Rate Risk of Sanyo

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    Currency Risk. Sanyo produces audio and video consumer goods and exports a large fraction of its output to the United States under its own name and the Fisher brand name. It prices its products in yen, meaning that it seeks to maintain a fixed price in terms of yen. Suppose the yen moves from ¥103.155/$ to ¥97/$. What currency risk does Sanyo face? How can it reduce its exposure?

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    Solution Preview

    This case deals with Exchange Rate Risk :

    Organization which invest internationally in today's increasingly global investment arena face the prospect of uncertainty in the returns after they convert the foreign gains back to their own currency. Exchange rate risk is sometimes called currency risk.
    Transaction exposure arises whenever a company is committed to a foreign-currency-denominated transaction. Since the transaction ...

    Solution Summary

    This discusses the ways of managing exchange Rate Risk.