IB 201 Lecture Notes - Lecture 14: International Monetary Systems, Foreign Exchange Market, Transfer Pricing
15 Nov 2016
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Document Summary
How does a weaker or stronger dollar affect us firms business. The market entry risk analysis in four c"s. Competition risk for your startup: weak partner, operational problems, timing of entry, competitive intensity, poor execution of strategy. Culture risks company managing and serving customers across cultures: culture differences, negotiation patterns, decision making styles, ethical practices. Currency and financial risk: currency exposure, asset valuation, foreign taxation, inflationary aand transfer pricing. Why do exchange rates move and volatile: understand foreign exchange behavior in the context: International agreements and institutions about currency pricing: has been developed over a century. 1700- 1939 fixed exchange rate (gold standard: international monetary system that linked nations surrencies to specific values of gold. Competitive devaluation or the currency war which was caused by the great depression and ww1. Fixed exchange rate (bretton wood system or usd standard: international monetary system based on value of u. s. Weak us dollar due to oil crisis and vienam war.
