Question Details

How will Lubbock, Inc., be affected if Brazil- currency (the real) strengthens over time 


1. Economic Exposure. Lubbock, Inc., produces furniture and has no international business. Its
major competitors import most of their furniture from Brazil and then sell it out of retail stores in
the United States. How will Lubbock, Inc., be affected if Brazil- currency (the real) strengthens over time ?
2. Economic Exposure. Sooner Co. is a U.S. wholesale company that imports expensive
high-quality luggage and sells it to retail stores around the United States. Its main competitors also
import high-quality luggage and sell it to retail stores. None of these competitors hedge their
exposure to exchange rate movements. Why might Sooner- market share be more volatile over
time if it hedges its exposure?



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