The benefit to forecasting exchange rates

Question

Quizplus · Accepted Answer

Forecasting exchange rates is crucial for multinational corporations (MNCs) as they formulate international strategies. These strategies involve international sourcing, production, financing, and marketing, and exchange rate fluctuations can significantly impact their profitability. Therefore, MNCs need to have a good understanding of exchange rate movements to make informed decisions. The benefits of forecasting exchange rates do not depend on fixed exchange rates or on whether the euro or dollar dominates the financial markets.

The Benefit to Forecasting Exchange Rates