Question

Does the global nature of the industry economic characteristics present unique challenges? Should Ricoh Company, Ltd. hedge the Canadian dollar against the Japanese yen and American dollar?

Select “yes” for those statements that are accurate and choose “no” for those that are not.

1. Companies that export goods to foreign countries always gain in competitiveness when the currency of the country in which the goods are manufactured is strong.
   (Click to select)  Yes  No
   
2. CFO Richard Perri did express concern and emphasized hedging the Canadian dollar to provide stability in business planning.
   (Click to select)  Yes  No

Answer 1

Question 01: No
Explanation: The risk of adverse exchange rate shifts is that companies that are involved in exporting goods to other countries always gain in competitiveness when the currency of the country in which goods are manufactured is weak. This is because prices of the product can be set based on the foreign market condition which will be high in this case compared to the market condition that the manufacturer belongs to.

Question 02: Yes

Explanation: CFO Richard Perri suggested considering the hedging of currencies in order to provide stability in business planning. According to him, the greenback has been, in particular, the subject of much speculation when the proposed interest rate increases.