Tiffany’s yen-dollar exchange rate risk A LY Historical data warned Tiffany that the yen/dollar exchange rate could be quite volatile on a year-to-year and even month-to-month basis. Although a continued strengthening of the yen against the dollar was observed from 1983 to 1993‚ there was evidence that the yen was overvalued against the dollar in 1993‚ and thus a distinct probability that the yen may eventually crash suddenly. SE The predicted depreciation of the yen would have
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the Problem The U.S. and China trade imbalance continue to be on the rise. U.S. manufacturing firms and workers voiced complaints over the competitive challenges posed by cheap Chinese imports. China ’s trade policy of pegging its currency‚ the yuan‚ to the U.S. dollar has enabled an unfair trade advantage according to the U.S. Some have gone as far as calling it "currency manipulation." The outcome has been loss of U.S. manufacturing jobs and a U.S. trade deficit (Labonte & Morrison‚ 2005).
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of CHF1.3990/$. The dollar cost of CHF1 million is consequently CHF 1 million / CHF1.399/$ = $714‚796 2. If the Japanese yen–U.S. dollar exchange rate is ¥104.30/$‚ and it takes 25.15 Thai bahts to purchase 1 dollar‚ what is the yen price of the baht? Answer: To prevent triangular arbitrage‚ the direct quote of the yen price of the baht (¥/THB) must equal the yen price of the dollar times the dollar price of the baht (which is the reciprocal of the baht price of the dollar: ¥104.30/$ 1/(THB25
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fluctuation of the yen-dollar exchange rates. Due to the fact that the yen is considered to be overvalued with regards to the dollar‚ the uncertainty of future rates will diminish the company’s profits. In addition‚ Tiffany also keeps the company exposed to the volatility of the future exchange rate and related risks remain unhedged. As a result‚ the management came up with two-pillar strategy – to sell yen for dollars at a preset price in the future with a forward contract and to buy a yen put option with
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Econ 302 Name:_____________________ Fall 2014 Problem Set 1 (Thursday September 18‚ 2014 In class – no extensions) Please Print and Answer in the Provided Space 1) Consider the following estimates for an iPad sold in Canada in 2010: retail price $550 (say at Best Buy)‚ Apple (a U.S. corporation) wholesale price $475‚ Apple intermediate costs $385. Of Apple’s intermediate costs‚ $100 was wholly produced by U.S. manufacturers‚ and $285 from other foreign producers. Suppose the production chain was
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Tiffany & Co - Case Write-Up 1) In what way(s) is Tiffany exposed to exchange-rate risk subsequent to its new distribution agreement with Mitsukoshi? How serious are these risks? 2) Should Tiffany actively manage its yen-dollar exchange-rate risk? Why or why not? 3) If Tiffany were to manage its exchange-rate risk activity‚ what would be the objectives of such a program? Specifically‚ what exposures should be actively managed? How much of these exposures should be covered‚ and
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Hedging Tiffany and Co.’s Foreign Currency Exposure in Japan Prepared for the Board of Directors of Tiffany & Company D.A.M.M. Business Consultants June 15‚ 1993 Table of Contents Executive summary ………………………………… Risk of foreign exchange exposure in Japan ……… Overview of the Japanese Economy ………………. Industry analysis ……………………………………. Internal & external environmental analysis………. Financial analysis …………………………………... Hedging foreign exchange exposure ………………. Recommendation …………………………………… Appendices
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Our Mission‚ Values and Way ···································· Shiseido s Value Portfolio ··········································· Message from the President & CEO ························· Shiseido Snapshot Business Overview ············································· Overview of Results ············································ Major Events of the Year Ended March 2012 ··· An Interview with the President & CEO ··················· Shiseido s Next Era Has Begun ·································
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manager‚ with experience in working part-time. Finally‚ we estimate that the budget of our business will not out of 400 yuan. The materials will cost approximately 70% of the in total costs. We distribute them in our different products according to the customer needs which received by our questionnaire. During preparing the business‚ we will strictly control our budget within 400 yuan. 2. Company profile Our company’s name is D-LIFE. It was set up at the Guangdong University of Foreign Language Study
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after 11 years of fixing at 8.27‚ Chinese Yuan has been heading towards only one direction – all the way from 8.27 to 6.27. Although Yuan is a highly regulated currency by government‚ Chinese officials could no longer peg the Yuan as it used to be in a closed economy because WTO had opened up doors for Chinese manufacturers in 2001 to export cheap goods and services to developed countries. With trillions of foreign capital flooding into the country‚ Yuan has appreciated over 30% over seven years
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