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Thursday, December 12, 2013

Country Risk Analysis

Country Risk Analysis paladin Jeans bon ton, in its quest for international word picture, essential(prenominal) bring to pass an initial country take chances analytic thinking for Brazil. The country risk abstract entrusting examine the economicalal, translation, and transaction exposure on with the political, socio-economic, and environmental risks pertinent to hint Jeans ships party expanding into Brazil. Star Jeans Company will also use various summary techniques to apologize the risks identified in venturing into business in Brazil. The results of the analysis will be interpreted using qualitative and vicenary techniques that will allow Star Jeans Company to prep ar to scram a direct distant investment decision. Economic ExposureThe main(prenominal) precaution with economic exposure is that it affects the note value of the company?s bills flows through the fluctuation of foreign commutation localizes. Star Jeans Company is looking into expanding to Br azil; therefore, it must pay nearly direction to the commute rate fluctuations of the U. S. dollar (USD) and the Brazilian original (BRL). Managers at Star Jeans Company will need to disconcert economic exposure if they decide to expand into Brazil. As say in Investopedia, many international companies are significantly reveal to economic exposure. (2007). Star Jeans Company?s cash flows are at risk of being affected by exchange rate fluctuations, in this case fluctuations of the BRL.
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Star Jeans Companys strategy must overwhelm the consideration of selling future foreign currency, come to to the company?s curr ent net revenues in foreign currency. unriv! aled way of achieving this is by participating in the foreign exchange mart (Forex or FX) where currencies are traded. ?The overall forex market is the largest, virtually liquid market in the creation with an total traded value that exceeds $1.9 trillion [USD] per day and includes all of the currencies in the world? (Investopedia, 2007, 1). In addition, forex is a seamless 24-hour market as the locations in Sydney, Japan, If you wish to get a full essay, order it on our website: BestEssayCheap.com

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