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Topic: Business
Number of pages / Number of words: 3 / 689
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If yen appreciates, Merton can exercise the call options, take delivery of yen and pay its suppliers. If yen depreciates, Merton can let the call options expire, buy yen at spot and pay its suppliers. Therefore, with the currency option contract hedging, Merton only takes the upfront costs for risk.

Merton should practice the currency hedging:

International trading is not foreign to anyone anymore...


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It is not easy to find one made in USA nowadays. Therefore, it is not even a choice for the companies like Morton, doing business internationally, to limit its risk exposure to the currency fluctuations. Then again, it should not be their goal to make a big profit out it either. They should adopt the currency hedging practice as risk management; simply managing uncertainty in the currency fluctuations outside of their main business...


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General points of the essay

Thomas Merton Book Review Bargaining Power Of Suppliers Customer & Suppliers Spanish Economics Delivery Merton Industries Case Analysis Merton Industries Merton Supply Chain Collaboration between the Organization and Suppliers Value Delivery Network Why The Usd Appreciates In Value &Amp;Amp;Amp; The Role Of Us Federal Reserve Fk Coilover Suppliers CASE: TOYOTA, FORD, GM AND VOLKSWAGEN- SOME DIFFERING OPINIONS ABOUT WORKING WITH SUPPLIERS Donald Miller vs Thomas Merton Thomas Merton Merton's Strain Theory

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