Exam 9: Measuring and Managing Real Exchange Risk

When a currency depreciates,if the firm increases it foreign currency price to maintain its profits,it will ________.

Why is the pass-through from changes in exchange rates to changes in the prices of products not one-for-one?

In general,a real depreciation of the domestic currency ________ importers and ________ exporters.

In what production process are materials and intermediate parts sensitive to the real exchange due to the fluctuations currency values?

When managers respond to changes in the real exchange rate with their relative price,it is known as ________.

Another name for operating exposure is ________ exposure.

You have been asked to evaluate possible sites for an South American production facility that will manufacture your firm's products and sell them to the South American market.What real exchange rate considerations should you entertain in your evaluation?

What production process allows a multinational firm to shift or increase production to a plant in a country where the currency has depreciated in real terms in order to minimize costs?

The only way a firm does not have real exchange risk is in the case of the firm that is ________.

In the face of a currency depreciation,if the firm maintains its foreign currency price,it will ________.

When a real depreciation occurs in the domestic currency,who tends to be more profitable?

During a change in the real exchange rates,a major factor determining the response of the firm is the ________.

Lands' End is a U.S.mail-order company that sells clothing primarily from catalogs.Initially,all its catalog prices were quoted in U.S.dollars,but recently,the company has expanded and begun printing catalogs with prices denominated in British pounds.Given that the company wants to stand behind its prices for several months,what should the company do if the dollar-pound exchange rate changes?

What determines how much a foreign producer allows the dollar price of a product sold in the United States to be affected by a change in the real exchange rate?

An exchange rate pass-through describes the way managers of the firm choose to respond with their relative prices to changes in the ________.

Research indicates that the optimal plan for exporter firms to follow when the currency of a country depreciates is to

When a real appreciation occurs in the domestic currency,who tends to be more profitable?

When would be the best time for a firm to enter a foreign market as an exporter?

Which one of the following is NOT a type of subsidiary?

The development of what marketing strategy helps in situations of real exchange risk because consumers will not switch to competitors' products that enjoy a temporary pricing benefit from a favorable fluctuation in the exchange rate?