N110 International Business and Risk Adaptation

Task:

Evaluate how your chosen organization might be impacted by exchange rate volatility and how such foreign currency fluctuations might arise.
Discuss :
1. Currency fluctuation
Define what is currency fluctuation
Discuss either appreciation or depreciation
If your company’s home country depreciates relative to other currencies, what would be the impact on your organization:
The price of imported raw materials used by your company would rise. This is a risk/threat to your company due to increased costs and reduced profits. Provide an example illustrating how this has occurred & discuss effects it had on your company 
The price of your company’s exports to other countries would fall. This is an opportunity for your company as your company’s products would be cheaper in the foreign market and more competitive. Provide an example to illustrate how this has occurred to your company and discuss the effect it had on your company
If your company’s home country appreciates relative to other currencies, what would be the impact on your organization:
The price of imported raw materials used by your company would decrease. This could be seen as an opportunity to your company due to reduced costs and improved profits. Provide an example to illustrate how this has occurred to your company and discuss the effect it had on your company
The price of your company’s exports to other countries would rise. This is a threat for your company. Discuss the effect on your company
Provide one solution to mitigate the risk of exchange rate fluctuation – choose one from risk avoidance, risk adaptation, risk transfer and diversification. Explain how this works and show how your company has done this
2.Global supply and demand shocks [200 words, 4 citations]
Define what are global supply and demand shock ( I already have the definition for this )
Discuss the effect of the Covid-19 pandemic, the global banking/financial crisis of 2009, or any other global supply or demand shocks. Global supply chains have been disrupted, global demand has plummeted. What effect has this had on exchange rates
How has a change in exchange rates arising from global supply and demand shocks affected your company? Please research
Provide one solution to mitigate the risk of exchange rate fluctuation – choose one from risk avoidance, risk adaptation, risk transfer and diversification. You may also research any alternative risk mitigation strategy 
Define the risk mitigation strategy and show how your company has adopted this
3.Macro-economic policy
Define what is macro-economic policy [use of fiscal (taxes )and monetary policy (interest rates) adopted by the government/Central Bank to obtain macro-economic objectives]   ( (I already have the definition for this )
Explain the role that Central Banks play in macro-economic policy i.e. they can make adjustments to the rate of interest and exchange rate in order to pursue their own sovereign interests, for example to promote domestic economic growth or reduce a balance of payments deficit (a Balance of Payments surplus occurs when a country’s import expenditures are lower greater than its export earnings. This is considered favorable)
How could a country’s macro-economic policy affect interest rates 
What effect does interest rates have on exchange rates (positively correlated)
Provide an example to show how interest rate fluctuations caused by changes in a country’s fiscal and monetary policy cause the exchange rate to change and explain how this affected your chosen company
Provide one risk mitigation strategy to combat fluctuating exchange rates
Define this strategy and show how your company has adopted this strategy.

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