Scenario - S & I Creations Sven and Ingrid Allgertson developed the idea for their thriving business while awaiting the birth of their first child, Olga. Finding nowhere to purchase fine handmade baby clothing and other items, the couple decided to start their own business. Neither Sven nor Ingrid imagined just how successful this endeavor would turn out to be for them. Their designer baby clothes and products were an instant hit in the world marketplace. And even though the baby items are quite expensive to purchase, shoppers from around the world are only too happy to spend large sums of money on their beloved children. Originally S & I Creations only sold products within Sweden, but soon global demand necessitated the company offer its products in several other foreign markets. Now the proud parents of baby Olga are also the proud owners of a $10 billion per year business. Sven and Ingrid cannot wait to see what the future holds for their family and their business operations. S & I Creations has over ten thousand customers from London, England. The currency of England is not valued the same as the currency of Sweden. Which one of the following would S & I Creations be most interested in when it comes to currency value?

Question

Scenario - S & I Creations Sven and Ingrid Allgertson developed the idea for their thriving business while awaiting the birth of their first child, Olga.  Finding nowhere to purchase fine handmade baby clothing and other items, the couple decided to start their own business.  Neither Sven nor Ingrid imagined just how successful this endeavor would turn out to be for them. Their designer baby clothes and products were an instant hit in the world marketplace.  And even though the baby items are quite expensive to purchase, shoppers from around the world are only too happy to spend large sums of money on their beloved children. Originally S & I Creations only sold products within Sweden, but soon global demand necessitated the company offer its products in several other foreign markets.  Now the proud parents of baby Olga are also the proud owners of a $10 billion per year business.  Sven and Ingrid cannot wait to see what the future holds for their family and their business operations. S & I Creations has over ten thousand customers from London, England.  The currency of England is not valued the same as the currency of Sweden. Which one of the following would S & I Creations be most interested in when it comes to currency value?

Quizplus · Accepted Answer

S & I Creations would be most interested in the currency exchange rate as it affects the value of their products in foreign markets and their profitability. They need to keep track of the exchange rate to determine how much they will charge for their products in the foreign market, as well as to calculate their profits correctly. The gold standard, Bretton Woods system, International Monetary System, and foreign direct investment margin are not relevant to their immediate concerns of selling their products in foreign markets.