Country Risk Analysis

Country Risk Analysis principal sum Jeans bon ton, in its quest for international film, essential bring to pass an initial country take chances abridgment for Brazil. The country risk psychodepth psychology entrusting examine the economicalal, translation, and transaction exposure on with the political, socio-economic, and environmental risks pertinent to hotshot Jeans ships party expanding into Brazil. Star Jeans Company will also use various analysis techniques to apologize the risks identified in venturing into business in Brazil. The results of the analysis will be interpreted using qualitative and numeric techniques that will allow Star Jeans Company to prep be to consider a direct contrasted investment decision. Economic ExposureThe chief(prenominal) precaution with economic exposure is that it affects the note value of the go with?s bills flows through the fluctuation of remote commutation localizes. Star Jeans Company is looking into expanding to Br azil; therefore, it moldiness pay exclude direction to the central rate fluctuations of the U. S. dollar (USD) and the Brazilian rattling (BRL). Managers at Star Jeans Company will need to evade economic exposure if they decide to expand into Brazil. As say in Investopedia, many international companies are significantly exposed to economic exposure. (2007). Star Jeans Company?s cash flows are at risk of being affected by exchange rate fluctuations, in this case fluctuations of the BRL.

Star Jeans Companys strategy must overwhelm the consideration of selling future foreign currency, competent to the company?s current ne t revenues in foreign currency. unrivaled w! ay of achieving this is by participating in the foreign exchange foodstuff (Forex or FX) where currencies are traded. ?The overall forex market is the largest, virtually liquid market in the area with an middling traded value that exceeds $1.9 trillion [USD] per day and includes all of the currencies in the world? (Investopedia, 2007, 1). In addition, forex is a seamless 24-hour market as the locations in Sydney, Japan, If you wish to get a full essay, order it on our website: OrderCustomPaper.com

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