International finance plays a fundamental role in the global economy. Currency conversion rate changes are the most obvious risk of conducting business internationally. Foreign exchange rate is the amount of one currency needed to purchase one unit of another. (Brealey, Myers, and Marcus, 2003) When a company begins a transaction in a foreign currency, it accepts any economic risk due to fluctuating exchange rates. The globalization of the world economy and the devaluation of the U.…
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showed last 75 words of 762 total
…and digest a large volume of information, including spot and forward exchange rates. (Brealey, Myers, and Marcus, 2003) Companies must also be aware of the currency conversion and funds transfer fees and government regulations regarding allowable transactions and currency controls. References: Foreign Exchange. Retrieved December 06, 2005, from http://www.cambridgefx.com/currency-exchange/currency_exchange.html Fundamentals of Corporate Finance (4th ed.) R.A. Brealey, S.C. Myers, & A.J. Marcus, McGraw-Hill/Irwin, 2004. New York, NY