Common mistakes new Vice-Presidents of International Sales make

What are some common mistakes new Vice-Presidents of International Sales make, such as PM Company's VP, and why? It would be helpful for me to have specific companies and include web links or books you used in your research. Do not use the classic example of Chevy Nova (nova meaning "no-go").

Foreign exchange risk, interest rate and exchange rates

In international cash management, managers have a choice between managing only foreign exchange risk or managing foreign exchange and interest rate risk together. Considering only nominal changes in exchange rates and nominal interest rates, do you expect the inclusion of interest rate risk in the analysis to suggest that the cash portfolio is more or less risky than an examination of foreign exchange risk or foreign exchange and interest rate risk together? Answer as completely as possible.

Portfolio risk

A. U.S. investor has a portfolio of French, German, Italian, and Dutch bonds. Is this portfolio less risky in U.S. dollar terms now that the euro is the common currency of Europe, since the portfolio is now only exposed to a single exchange rate rather than to four exchange rates for the franc, mark, lira, and guilder?

Maturity of futures contract

Currency futures contracts are traded on organized exchanges. Suppose you sell a contract on Australian dollars in the amount of A$100,000 on the Chicago Mercantile Exchange at $0.7900/A$. Upon maturity of the contract, the futures price is $0.7500/A$. a. Have you made money or lost money? How much have you made or lost? b. If you hold your position to maturity, what do you do to settle the contract? How are the gains or losses paid?

Transfer Price

AGC and Co., a U.S. firm with subsidiaries in Chile and Brazil, can justify a transfer price anywhere between $600 and $800 per unit for cookware sets shipped from Chile to Brazil while simultaneously preserving positive profits in both locations. The corporate income tax rate in Chile is 30 percent and the corporate income tax rate in Brazil is 40 percent. There is no repatriation of profits currently planned, and AGC has no excess tax credits elsewhere. a. Should AGC use the high transfer price or the low transfer price for goods shipped from Chile or Brazil? b. Suppose Brazil introduces an import tariff of 20 percent. With the import tariff, should AGC use the high transfer price or... click for more