Your Boston-headquartered manufacturing company, Wruck Enterprises, obtained a 55-million-peso loan from a Mexico City bank last month to fund the expansion of your Monterrey, Mexico, plant. The exchange rate was 14 U.S. cents per peso when you took out the loan, but since then the exchange rate has dropped to 6 U.S. cents per peso. Has Wruck Enterprises made a gain or a loss due to the exchange rate change, and how much? Note that your shareholders live in the United States. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar The company made a -Select- of $

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Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.