Chapter 7 Additional EPs

Please place X under an appropriate action in response to foreign-currency rate change

Buy = Enter into a forward contract to buy foreign currency.

Sell = Enter into a forward contract to sell foreign currency.

Area of Foreign Currency Exposure	Direct Rate or Currency	Expected Direction	Buy	Sell	Neither
Exporting	Direct rate	Up	_____	______	______
	Direct rate	Down	_____	_____	______
	U.S. dollar	Strengthen	______	____	______
	U.S. dollar	Weaken	_____	______	______
	Foreign	Strengthen	_____	______	______
	Foreign	Weaken	______	_____	______
2. Importing (Payable)	Direct rate	Up	_____	_____	______
	Direct rate	Down	______	______	______
	U.S. dollar	Strengthen	______	______	______
	U.S. dollar	Weaken	______	_____	______
	Foreign	Strengthen	______	______	______
	Foreign	Weaken	__x____	______	______

Tips - Direct rate (quote): 1 Euro = $1.30

UP: 1 Euro = $1.50 ---- Foreign currency strengthens or $US weakens

DOWN: 1 Euro = $1.10 ---- Foreign currency weakens or $US strengthens