Assignment 1: Discussion Question
The Mexican ceramics folk-art firm signs a contract for the Mexican firm to deliver 1500 pieces of artwork to an Italian firm within the next 120 days. The contract is denominated in pesos. During this time the Mexican peso strengthens against the euro. What is the net profitability effect on the Mexican firm? What international market concept is demonstrated in this example? Discuss the risks associated with changing exchange rates and international commerce and provide a scenario demonstrating these risks.
By Saturday, May 3, 2014 respond to the discussion question assigned by the faculty. Submit your response to the appropriate Discussion Area. Use the sameDiscussion Area to comment on your classmates’ submissions and continue the discussion until Wednesday, May 7, 2014. Comment on how your classmates would address differing views.