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1: Hello Marie and class,
I do believe that it is very important to run a business and be diverse. However not understanding or recognizing cultural differences and the barriers in legal, political, technological, and economics can result in a business failure because cultural risks are discounted. A cultural barrier can also be when there is lack of understanding within the local business customs. One needs to have full appreciation of how businesses are ran in a foreign market in order to be a success.
2:Fluctuations in the exchange rate can have big effects on businesses that have companies overseas of that trade internationally because they are will be working under the changes that currency takes in different areas of the global market. This makes it hard to predict gains and losses, and also to know accurate money figures for contracts for future ventures. The changes in currency have to be monitored as best as possible. Another consideration is to attempt to lock in an exchange rate for a fixed period of time with contracts. There are risks in business, but doing business overseas presents even more risks with currency exchange rates.
3:What I found interesting about exchange rates was the ability to make a profit without risk when the cross rates between currencies are out of line, known as Arbitrage. So, the opportunity called Triangular Arbitrage happens when the currencies of three different countries are exchanged for an overall gain. Seems like an easy way to make money, but I wonder how often cross rates are out of line.
4:Rhondalyn, financial management focuses on ratios, equity, and debt. Financial managers are the people who will do research and based on the research. It decides what sort of capital to obtain in order to fund the companies assets as well as maximizing the value of the firm for all the stakeholders. It means applying general management principles to financial resources of the enterprise