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Economics

Exchange Rate Considerations

Please help me address the following case:

Mr. Swanson has expressed confusion about how foreign exchange rates will affect Content Cow Dairy if it expands to international markets. You tell Mr. Swanson that he has raised a good question and that you will draft and send him a report with information on this topic.

In your report, include the following:

- Compare/contrast the risks and benefits of pricing goods in U.S. dollars or pricing goods in local currency when selling in a foreign market.

- Explain rate parity theory and how it is used to predict future exchange rates.

- Calculate the current Forward Exchange Rate for the United States and Egypt. (Show your calculations).

- Explain the relationship between monetary policy, interest rates, and exchange rates.

- Briefly introduce other factors that influence exchange rate fluctuations. Address whether any of these are a factor when looking at the future exchange rate between the United States and Egypt.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9202227

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