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In early 2016, the same Germany machinery company has interest from four prospective clients from emerging markets: Indonesia, Brazil, Russia, and South Africa. They all want to buy ten machines, but the factory can only produce ten in time. Therefore, the company has to choose only one client. Given the volatility of the domestic currencies of the four prospective clients, the CFO would like to choose the client which is least likely to cancel the order due to currency volatility. The invoice comes due on June 30, 2016. According to volatility alone, which prospective client would be most likely to cancel the order?
In early 2016, the same Germany machinery company has interest from four prospective clients from emerging markets: Indonesia, Brazil, Russia, and South Africa. They all want to buy ten machines, but the factory can only produce ten in time. Therefore, the company has to choose only one client. Given the volatility of the domestic currencies of the four prospective clients, the CFO would like to choose the client which is least likely to cancel the order due to currency volatility. The invoice comes due on June 30, 2016. According to volatility alone, which prospective client would be most likely to cancel the order?
Indonesiais the country that is most likely tocancelthis order. This is due to itshigh volatility.Following thevolatility chartthat is attached to this question we can clearly spot thatIndonesiahas the mostlikelihoodto cancel the order.Thevolatilityof thecurrencyof the country Indonesia is shown to be high and thishigh volatilityis very much going to have animpacton trade.When there is aweaknessin thecurrencyof a nation, thecostof import would go up.Read more onbrainly.com/question/13694329?referrer=searchResults...
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