1 . You manufacture wine goblets. In mid-June, you receive an order for

10,000 goblets from Japan. Payment of ¥400,000 is due in midDecember. You expect the yen to rise from its present rate of $1 = ¥130

to $1 = ¥100 by December. You can borrow yen at 6 percent a year.

What should you do?

 

2 You are the CFO of a U.S. firm whose wholly owned subsidiary in

Mexico manufactures component parts for your U.S. assembly

operations. The subsidiary has been financed by bank borrowings in the

United States. One of your analysts told you that the Mexican peso is

expected to depreciate by 30 percent against the dollar on the foreign

exchange markets over the next year. What actions, if any, should you