Chapter 13: Exchange Rates and the Foreign Exchange Market
Suppose Best Buy electronics is expecting a shipment of Sony TVs in a month, for which it needs to pay Yen. It could wait until the shipment to buy the Yen to pay Sony, but there is uncertainty with respect to the future value of that Yen. If the Yen appreciates, the $ price the store has to pay to get the TVs could change. ................
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