You have a business based in Vietnam that has just imported a product from Thailand. The invoice for this purchase is denominated in Vietnamese dong and must be paid in 60 days. That is, you will pay for your purchase in Vietnamese dong.

Given this arrangement, what is the exchange-rate risk you face as an importer?

Select one:

a.The risk is that the Vietnamese dong will strengthen against the Thai Baht.

b.The risk is that the Vietnamese dong will weaken against the Thai Baht.

c.Given the close proximity of Vietnam and Thailand, the two currencies will move in unison.

d.You face no exchange-rate risk since you make your payments in Vietnamese dong.

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