1. How do you value a country's currency?
2. How do you protect assets from price inflation or devaluation?
2.1. 2 ways to protect against exchange rate fluctuations:
2.1.1. minimize current assets
2.1.2. maximize current liabilities
2.2. Strategies when home currency is stronger:
2.2.1. borrow working capital from weak currency countries
2.2.2. convert idle foreign cash into home currency
2.2.3. engage in a currency hedge
2.2.3.1. buffer against currency fluctuations
2.2.3.2. 6 kinds:
2.2.3.2.1. currency swap
2.2.3.2.2. forward contract
2.2.3.2.3. non-deliverable forward contract
2.2.3.2.4. option contract
2.2.3.2.5. spot contract
2.2.3.2.6. window forward contract
2.2.4. increase inventories of items imported with weaker currency
2.2.5. increase payables in countries with weaker currency thru longer credit terms
2.2.6. reduce receivables in countries with weaker currencies
2.2.7. repatriate profits...
2.2.8. request payment in stronger currency
3. What types of exchange controls are available?
3.1. Administered exchange rates
3.1.1. rates artificially set
3.2. Multiple exchange rates
3.2.1. more than 1 rate to exchange currency