3. Suppose an agribusiness in Texas exports its crops. It expects an 18 million peso invoice for an export to Mexico to be paid in 90 days. The current spot and 90-day forward rates are $0.7502/Peso and $0.7422/Peso respectively.
4. A U.S.-based MNC imports 30 percent of its supplies from Europe. Exports to Europe, which are invoiced in euros, account for approximately 50 percent of its revenues. In 1-2 pages, explain how the MNC can reduce its economic exposure to exchange and interest rates fluctuations.
Your answers must be presented in a Word document; if you do any calculations in Excel, copy and paste them from Excel into the Word document. Make sure your responses are clearly marked so your instructor knows which questions your responses are answering; note that your response for question 4 alone should amount to 1-2 pages. Written comments must be formatted in conformity with the CSU-Global Guide to Writing and APA Requirements (Links to an external site.).
For numerical answers, briefly show or explain how you arrived at your solutions to get partial credit if one or more answers are incorrect.
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