LT Week V Essay

Submitted By benjamincarroll
Words: 408
Pages: 2

Since business here at Riordan has seen so much success as of late, the thought of expanding to an international location is beginning to gain popularity. We believe that the rate of return Riordan could see with the expansion of an international location will make the risk worth it. However one of the main concerns that is deterring talks of this expansion in the exchange rate risk that comes with conducting business across boundary lines. Unfortunately for us, we believe there is a risk that we could not see profits meet their full potential because of the exchange rate that would be applied to any funds that would be coming back into the US. In order to mitigate this exchange rate risk our first step would be to figure out which country would be the best fit for our international location. Somewhere that has strong stable market and a good economy would be a good place to start. A strong stable exchange market would assure Riordan that the exchange rate with this specific country would somewhat stay the same for a long period of time. If we were to invest in a market that was not stable, our investment value would decrease if the rate of currency in that country were to decrease.
Another way that Riordan would be able to mitigate exchange rate risks would be to maintain the same level of foreign purchases and sales. When we are buying and selling goods or products in a foreign country it would make much more sense to do so in the current currency. It would only…