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Optimal Capacity Investment

Table of Contents

1.0 Exchange rate forecast.

2.0 Sensitivity analysis.

3.0 Scenario analysis.

4.0 Recommendations.

1.0 Exchange Rate Forecast

If you think that bankers only need to focus on currency and exchange rates, think again. Many businesses face currency risks, whether they know it or not. Exchange rate risk is again on the agenda of companies that have clients, suppliers or products in other countries, with the recent wild fluctuations in global currencies.

March and April carry drastic currency market swings with the outbreak of the coronavirus. The global economy has been broken by stricter laws to stem the tide, leading to a drop in oil prices and stock markets. The market is searching for safe havens, heading towards the US dollar, the Japanese yen and the Swiss franc (Dyhrberg, 2016).

The key lesson is that if you run an income generating business o....