Assume you manage a firm that faces transaction exposure.Your company manufactures and sells scooters around the world.You have just completed a large sale of scooters to a chain of stores in Sweden and received a promised payment of 600 krona per scooter.You have already sold 2,500 scooters and are now awaiting payment which you expect to receive in 90 days.The exchange rate today is 8.4 krona per dollar.Over the next ninety days,the indirect exchange rate unexpectedly moves from 8.4 to 8.8.What is the fall in domestic revenue due to this unexpected move in the exchange rate?

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The Answer of Assume you manage a firm that faces transaction exposure.Your company manufactures and sells scooters around the world.You have just completed a large sale of scooters to a chain of stores in Sweden and received a promised payment of 600 krona per scooter.You have already sold 2,500 scooters and are now awaiting payment which you expect to receive in 90 days.The exchange rate today is 8.4 krona per dollar.Over the next ninety days,the indirect exchange rate unexpectedly moves from 8.4 to 8.8.What is the fall in domestic revenue due to this unexpected move in the exchange rate?

Assume You Manage a Firm That Faces Transaction Exposure