Currency Exchange Risk

Currency Exchange Risk (300 words)
Examine the concept of the exchange rate between the Japanese yen and the U.S. dollar. Choose a Japanese company, such as Toyota, Canon, or Mitsubishi, and identify a strategy that the company might consider to reduce its currency exchange risk associated with Japanese and U.S. currencies.
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1. Identify exchange rate of Yen and USD. Analyzes the exchange-rate-based value of selling goods in the United States exported from another country. Determines the value of the U.S. dollar against the currency of another country to illustrate the value using the U.S. selling price of imported goods.

 

2. Explains how changes in the exchange rate would affect profitability for exports from another country to the United States, citing specific examples.

 

3. Identifies risks related to changes in the exchange rate from a management perspective, citing specific examples of financial consequences.