2.8 The impact of fluctuations in currency on cost of wine

Question 1

Buyer eurozone - seller australia

Does the date of paying influence the profit and loss of the buyer?

Answer 1

clearly yes !

ordering date: 1.50 AUD = 1.00 €
delivering date: 1.37 AUD = 1.00 €

Question 2

The impact of fluctuations in currency on cost of wine:

Name 6 possibilities to mitigate the impact of fluctuation:

Answer 2

oft ftf

1. ) options
2. ) fixing prices in currency of the importer
3. ) to buy currency
4. ) fix exchange rates by contract with banks
5. ) trading
6. ) foreign currency account

Question 3

The impact of fluctuations in currency on cost of wine

options:

Name 4 advantages and 1 disadvantage for the importer !

Answer 3

advantages for buyer = disadvantages for producer

1. ) reserve a certain amount of wine or currency by contract
2. ) buyer can take it or leave it
3. ) negotiating power by large importer
4. ) minimal risk

Disadvantages for buyer = advantage for the Producer:

1.) higher prices = risk for producer

Question 4

The impact of fluctuations in currency on cost of wine

fixed price in currency of importer:

1. ) is it a common thing for the producer?
2. ) Why would that be meaningful for the buyer?

Answer 4

1.) No !!!

2. ) - because of fluctuations in currency
   
   • to set the retail prices

Question 5

The impact of fluctuations in currency on cost of wine

To buy currency to cover specific orders:

1.) is that meaningful for a smaller or larger producer
& 2.) Why?

Answer 5

1.) Nope

2.) business activity = trained labour is required
= no speculations

Question 6

trading in EU/USD (safer currency)

Name 2 advantages of that !

Answer 6

• less exposed to currency fluctuations

- time saving (exchange all the time)

Question 7

The impact of fluctuations in currency on cost of wine

Name the advantages and disadvantages to open a foreign currency account!

Answer 7

advantages:

• direct payments in same currency
• EU Zone = same currency

disadvantage:

• a sum of currency has to be bought
• not the most efficient way

Question 8

The impact of fluctuations in currency on cost of wine

opening an account in an overseas bank

Answer 8

= same disadvantages as foreign currency account