| Question | Suppose Super D’ Hiver––a hypothetical French snowboard retailer––wants to order 5000 snowboards made in the United States. The price per board is $200, the present is 1 euro = $1, and payment is due in dollars when the boards are delivered in 3 months. Use a numerical example to explain why exchange-rate risk might make the French retailer hesitant to place the order. How might speculators absorb some of Super D’ Hiver’ risk? |
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| Subject | business-economics |
