I need a 125 word reply to each of the four following forum postings in a finance class (500 words total) You are responding to comments made by other students in the class. MUST BE ORIGINAL! Forum #1 When an organization decides to engage in international financing activities, they also take on additional risk as well as opportunities. The main risks that are associated with businesses engaging in international finance include foreign exchange risk and political risk. These risks may sometimes make it difficult to maintain constant and reliable revenue. When an organization decides to engage in international financing activities, they also take on additional risk as well as opportunities. The main risks that are associated with businesses engaging in international finance include foreign exchange risk and political risk. These risks may sometimes make it difficult to maintain constant and reliable revenue. Foreign exchange risk occurs when the value of investment fluctuates due to changes in a currency's exchange rate. When a domestic currency appreciates against a foreign currency, profit or returns earned in the foreign country will decrease after being exchanged back to the domestic currency. Political risk transpires when a country's government unexpectedly changes its policies, which now negatively affect the foreign company. These policy changes can include such things as trade barriers, which serve to limit or prevent international trade. “Since 2010, one in ten of the countries surveyed have experienced a significant increase in the level of short-term political risk. These risks include governments asserting control over natural resources, regimes being ousted by popular uprisings and the expropriation of foreign investors' assets” (Brown, Sophle. 2013). References Brown, Sophle. Political instability on the rise. Dec 11, 2013. Retrieved from web: http://www.cnn.com/2013/12/11/business/maplecroft-political-risk/ Forum #2 Multinational companies seem to be the standard for future business. They are typically more productive and pay their workers more than comparable locally owned businesses (Eun & Renick, 2015). With the many advantages that are available to multinationals it is no surprise that companies are shifting in this direction. However, all of the advantages do not come risk free as you may have expected. Two of the significant risks associated with multinationals and international financial management are foreign exchange risk and political risks. Foreign exchange risk is what would likely be the first thing you would consider when thinking about international finance. Exchange rates fluctuate on a regular basis and can be somewhat unpredictable at times. This has been the case since the early 1970s when fixed exchange rates were abandoned (Eun & Renick, 2015). Exchange risk is the difference between the exchange rate at the moment a business deal is closed for a given amount and the exchange rate at the moment when .

1. I need a 125 word reply to each of the four following forum
postings in a finance class (500 words total) You are responding
to comments made by other students in the class. MUST BE
ORIGINAL!
Forum #1
When an organization decides to engage in international
financing activities, they also take on additional risk as well as
opportunities. The main risks that are associated with
businesses engaging in international finance include foreign
exchange risk and political risk. These risks may sometimes
make it difficult to maintain constant and reliable revenue.
When an organization decides to engage in international
financing activities, they also take on additional risk as well as
opportunities. The main risks that are associated with
businesses engaging in international finance include foreign
exchange risk and political risk. These risks may sometimes
make it difficult to maintain constant and reliable revenue.
Foreign exchange risk occurs when the value of investment
fluctuates due to changes in a currency's exchange rate. When a
domestic currency appreciates against a foreign currency, profit
or returns earned in the foreign country will decrease after
being exchanged back to the domestic currency. Political risk
transpires when a country's government unexpectedly changes
its policies, which now negatively affect the foreign company.
These policy changes can include such things as trade barriers,
which serve to limit or prevent international trade. “Since 2010,
one in ten of the countries surveyed have experienced a
significant increase in the level of short-term political risk.
These risks include governments asserting control over natural
resources, regimes being ousted by popular uprisings and the
expropriation of foreign investors' assets” (Brown, Sophle.
2013).
References

2. Brown, Sophle. Political instability on the rise. Dec 11, 2013.
Retrieved from web:
http://www.cnn.com/2013/12/11/business/maplecroft-political-
risk/
Forum #2
Multinational companies seem to be the standard for future
business. They are typically more productive and pay their
workers more than comparable locally owned businesses (Eun &
Renick, 2015). With the many advantages that are available to
multinationals it is no surprise that companies are shifting in
this direction. However, all of the advantages do not come risk
free as you may have expected. Two of the significant risks
associated with multinationals and international financial
management are foreign exchange risk and political risks.
Foreign exchange risk is what would likely be the first thing
you would consider when thinking about international finance.
Exchange rates fluctuate on a regular basis and can be
somewhat unpredictable at times. This has been the case since
the early 1970s when fixed exchange rates were abandoned (Eun
& Renick, 2015). Exchange risk is the difference between the
exchange rate at the moment a business deal is closed for a
given amount and the exchange rate at the moment when
payment is made (Griffin, 2016). Exchange rates can be affected
by a number of things and must always be considered when
making international finance decisions.
Political risks are another major factor in determining the value
of international financial management opportunities. Political
risks arise from a sovereign nation's ability to change the “rules
of the game” sometimes leaving the affected parties without
effective recourse (Eun & Renick, 2015). These risks can vary
from minor, such as small tax changes, to major, such as the
government freezing international money transfers making it

3. impossible to convert local currency into that another country
(Griffin, 2016). These risks exist at the micro and macro levels
and can be classified as transfer, operational or control risk
(2015). With all that taken into consideration while their are
many opportunities for multinationals, it is clear that making a
smart decision is much more complicated than in domestic
business.
Reference
Eun, C., & Renick, B. (2015).
International Financial Management, Seventh Edition
. New York, NY:McGraw-Hill Education.
Griffin, D. (2016, July 10).
What Are Some of the Most Significant Financial Risks of
Conducting Business Internationally?
. Houston Chronicle
Forum #3
International monetary systems are sets of internationally
agreed rules, conventions and supporting institutions, that
facilitate international trade, cross border investment and
generally the reallocation of capital between nation states. They
provide means of payment acceptable between buyers and
sellers of different nationality, including deferred payment. To
operate successfully, they need to inspire confidence, to provide
sufficient liquidity for fluctuating levels of trade and to provide
means by which global imbalances can be corrected. A good
international monetary system should provide adequate liquidity
to the world economy, smooth adjustments mechanism, and
safeguard against the crisis of confidence in the system.
“Instead of establishing a sound money foundation that would
permit free-market mechanisms to optimize capital flows and
maximize long-term economic growth, we have empowered
central banks to engage in central planning” (Shelton, Judy.

4. 2015).
Provision takes the form of adequate units of official reserves
held by governments of countries involved in foreign trade. It
also requires incentives for commercial banks operating as
foreign exchange dealers to hold sufficient foreign exchange
reserves to satisfy the requirements of the private sector.
Smooth adjustment mechanism requires that individual nations
carry out economic and financial policies conducive to
maintaining reasonable well balanced international payment
systems, or that financial mechanisms operate to provide
payments adjustment, or that governments act to preserve
equilibrium in the foreign exchange markets.
References
Shelton, Judy. Spring-Summer 2015, v. 35, iss. 2, pp. 273-89.
Fix What Broke: Building an Orderly and Ethical International
Monetary System. Retrieved from Ashford Library:
http://eds.a.ebscohost.com.proxy-
library.ashford.edu/eds/detail/detail?vid=4&sid=4ee49db0-
c312-44fc-8bc4-
767af7acaf4d%40sessionmgr4001&hid=4213&bdata=JnNpdGU9
ZWRzLWxpdmU%3d#db=eoh&AN=1518744
Forum #4
Well I would like to begin by pointing out that the criteria for a
“good” international monetary system is not a matter of fact but
more a matter of opinion and those opinions vary greatly among
economists. I apologize in advance because, while I will try and
keep this short, it may become somewhat of a crusade as this is
a topic I feel passionately about.
In my opinion it is a mistake to implement a system of fiat
money. So the primary, and truly only, criteria necessary for a
good international monetary system is that the money be backed
by a good which is easily exchangeable. Precious metals were
very effective until the interwar period when governments

5. intervened in order to fund the war efforts(Eun & Renick,
2015). You see the amount of money the government had was
simply not enough to keep up with the expenses of war. The
only way to fund the war would have been through unbearably
higher taxes. So the government made it illegal to own gold,
forced all citizens to sell their gold and then created the fiat
money system that we use today. This gave the government to
print as much money as needed which meant that the value of
the dollar was inflated. This essentially worked as a tax that
was invisible.
I will resist the urge to go into a full on rant about how much of
a genius Milton Friedman is and how awful the Federal Reserve
is but I would recommend that anyone who is interested in
learning a bit more about the changes in our monetary system
since the creation of income tax and the Federal Reserve might
consider watching this video.
https://www.facebook.com/thefreethoughtprojectcom/videos/17
54839838069609/
It is about 7 minutes long (sorry btw it is a cartoon) and while
everyone may not agree with it I have done a considerable
amount of research into the topic and I can say that it is pretty
accurate and a great way to provide a brief introduction into a
very important topic. It does include some things in the
beginning about Britain which don’t directly apply but are
interesting.
So back on topic, I believe it is essential that any monetary
system be backed by a commodity such as gold or silver. When
it is backed simply by the government who issues it that
government has complete control of its value and can
manipulate it in ways that are a disadvantage to its citizens. An
elastic currency is fantastic in theory but the maturity and
responsibility required to make it effective is not something that
we can trust any group of people to control, not even our own
government and especially not the Federal Reserve which

6. practically no one realizes is not a part of the government, sorry
Keynes. If a monetary system is backed by something like the
gold standard inflation is controlled by the market which is
much more dependable than a group of politicians and private
banks. This provides stability to the money and limits the
potential for manipulation and crooked financial practices.
Reference
Eun, C., & Renick, B. (2015).
International Financial Management, Seventh Edition
. New York, NY:McGraw-Hill Education.