A Weak Dollar versus a Strong Yuan

A Weak Dollar versus a Strong Yuan

Some reading this case (Peng, 2013, Chapter 7, pp. 108-109) may reach the conclusion that international markets have many risks and that changes in currency values is one of them. They would be right, of course.

However, some may go a step farther and feel that the risks are too many and too great, thus a firm should focus only on domestic markets.

You need to help them understand the difference between avoiding risk (not doing anything that contains risk) and risk avoidance via risk management.

Write a 2 page paper (in addition to title and reference pages) that addresses the following elements in your paper:

• Why is the value of the yuan relative to the dollar so important?
• If you were the CEO of Wal-Mart and were preparing for a meeting with the most vocal members of the US Congress on China’s currency “manipulation,” what would you say to them?
• Assuming that the yuan will appreciate further against the dollar, what should Wal-Mart do?
• If you were an exporter from Argentina, Indonesia, Malaysia, or South Korea and selling to China, would you accept payment in yuan (instead of dollars)?

Include a title page and 3-5 references. Only one reference may be from the internet (not Wikipedia). The other references must be from the Grantham University online library. Please adhere to the Publication Manual of the American Psychological Association (APA), (6th ed. 2nd printing) when writing and submitting assignments and papers.