Question Details

Explain how Baltimore can attempt to reduce its economic exposure 


1. Reducing Economic Exposure. Baltimore, Inc., is a U.S.-based MNC that obtains 10 percent of its supplies from European manufacturers. Sixty percent of its revenues are due to exports to Europe, where its product is invoiced in euros. Explain how Baltimore can attempt to reduce its
economic exposure to exchange rate fluctuations in the euro.
2. Reducing Economic Exposure. UVA Co. is a U.S.-based MNC that obtains 40 percent of its
foreign supplies from Thailand. It also borrows Thailand- currency (the baht) from Thai banks
and converts the baht to dollars to support U.S. operations. It currently receives about 10 percent
of its revenue from Thai customers. Its sales to Thai customers are denominated in baht. Explain
how UVA Co. can reduce its economic exposure to exchange rate fluctuations.



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