Respuesta :
Answer: Option 3
Explanation:
Exchange rate forecasts are important to evaluate the foreign denominated cash flows involved in international transactions. Thus, it is important to evaluate the benefits and risks attached to the international business environment.
It is important for Multi National Company’s to be knowledgeable in foreign exchange forecasts to aid formulating international sourcing, production, financing, and marketing strategies.
Option 1 is wrong because when exchange rates are fixed then there are no uncertainties as you are sure currency’s would remain the same
Option 2 is wrong because although Dollars and Euro are the standard for most business transactions due to it’s relative stability it’s important to understand forecasts because it doesn’t guarantee that the exchange rate would remain same forever. For example in the 1900’s N1=$1 now it’s not because of economic changes a dollar is about N360 (Nigerian naira) so a business would need to anticipate fluctuations if it’s to transact in the future and it’s to transact in Dollars.
Answer:
Accrue to and are a vital concern for MNCs formulating international sourcing, production, financing and marketing strategies ( 3 )
Explanation:
MNCs are multinational companies who have their assets, businesses and offices in more than one country usually in multiple countries across the globe. Forecasting exchange rate is very vital for them because the changes in exchange rate of currencies plays a major role on how they Finance, source for funds internationally and also what market strategies they are to employ in order to take maximum advantages from the changes in the exchange rate.
forecasting exchange rate during periods of fixed exchange rates would yield a very non-significant result
