Scenario: Trader's Paradise
Trader's Paradise is a global merchant that sells a variety of products. The company operates in forty-eight different countries (some developed, some developing) and some former communist countries. The company faces substantial risks given the differing conditions in foreign exchange markets.
-When doing business with former communist countries,Trader's Paradise insists on getting paid in a currency that can be traded freely in the foreign exchange market.The price of this currency is determined by the forces of supply and demand.Which of the following is the mode of payment illustrated in this scenario?

Question

Quizplus · Accepted Answer

Trader's Paradise insists on getting paid in a hard or convertible currency when doing business with former communist countries. This means that they prefer to be paid in a currency that can be easily exchanged for other currencies in the foreign exchange market, reducing their risk of facing currency restrictions or devaluation.

Scenario: Trader's Paradise Trader's Paradise Is a Global Merchant That Sells a Variety