Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph

Greco from Aug 24, 2020 to Dec 11, 2020.

9B20N020

BUSBOARD PROTOTYPE SYSTEMS LTD.: MAKING SENSE OF

FOREIGN EXCHANGE

Brian Lane and Craig Wilson wrote this case solely to provide material for class discussion. The authors do not intend to illustrate
either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying
information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the
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Copyright © 2020, Ivey Business School Foundation Version: 2020-07-03

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In June 2019, Patti Kornak, general manager for BusBoard Prototype Systems Ltd. (BusBoard), had been
having some challenging days at work. Ongoing changes in currency values were making it difficult for her
to decide when to buy and sell US dollars (USD) (see Exhibit 1). She wanted to evaluate BusBoard’s
methods for managing USD currency exchange and to consider how to make the company more profitable
based on currency movements. She recognized the need to address this quickly. During a management
meeting, she stated,

We need to figure out our foreign exchange procedures, because we really do not have any right now.
Our exposure to the USD is large, and timing our trades poorly can hurt the company. It is not helping
that revenues have been low for the past few months, and the choices we make with currency could
have a major impact on BusBoard’s ability to continue operations. One option is for me to continue
to trade currency based on instinct, and I could try to learn how to do this more efficiently. Another
option is for us to look at some sort of financial contracts. With less than US$5 million in sales per
year, I do not know if our size will be a limitation. I’m willing to look at both options, but whatever
we do, we need to get started before the exchange rate moves against us again.

Based in Calgary, Alberta, BusBoard made most of its sales in USD, with the remainder in Canadian dollars
(CAD). Patti had little training with currency strategies, so converting USD while preserving the value of
the company was an area of uncertainty for her.

BusBoard had recently placed an order totalling approximately US$25,000 for parts and supplies from one
of its Taiwanese suppliers at a USD/CAD exchange rate of 0.748.1 BusBoard generally paid 50 per cent
upfront, so making only a partial payment at the time introduced the risk that the second half of the payment
could become more expensive in the future. Regardless of what she decided to do about the company’s
ongoing exposure, Patti needed to move quickly. Between depressed revenues and currency conversion
concerns, BusBoard’s long-term viability looked uncertain.
Page 2 9B20N020

BUSBOARD PROTOTYPE SYSTEMS INC.

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
BusBoard designed and manufactured printed circuit boards targeted at the electronics hobbyist market (see
Exhibit 2). The founding partners worked in the company and included Patti as general manager, Scot Kornak
as president and engineering lead, and a third partner who managed accounting. BusBoard manufactured
products that were useful and built to high quality standards. Scot’s goals were ambitious—he wanted the
company to release a new product every month. It was challenging to design something new with such
regularity, but Scot reminded the engineers that “We have many good ideas that could be added to our sales
list. All it will take is some engineering work or supplier sourcing.” One recent product innovation was the
Junior Genius Blinky Lights Kit—an educational electronic circuit kit. BusBoard increased its exposure
through distributor agreements with well-established, reliable partners such as Amazon.com Inc., Arrow
Electronics, Jameco Electronics (Jameco), Mouser Electronics, and dozens of smaller companies. Since its
inception, BusBoard had developed many unique printed circuit board products and modified, enhanced,
combined, and redesigned these to fit many different needs and markets. The company also designed and
resold complementary hobbyist parts and products, including enclosures, hookup wires, plastic parts,
microcontroller boards, and peripherals.

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The Kornaks also owned Kornak Technologies Inc. (KTI), an engineering design and manufacturing company.
KTI’s exposure to the USD was similar to BusBoard’s in terms of sales percentage, although not as large in
volume. Patti did not want BusBoard’s exchange rate decisions to cause problems for KTI’s profitability.

THE ELECTRONICS HOBBYIST MARKET IN THE UNITED STATES

BusBoard’s primary market included electronics hobbyists in the United States, with a small percentage of
its customers located in Canada. In 2014, shipments of electronics components within the United States
grew at a rate of 4.9 per cent,2 which was faster than the overall economy was growing.3 A survey conducted
by Jameco showed that orders for electronic components from do-it-yourselfers and hobbyists were steadily
increasing.4 Greg Harris, Jameco’s vice-president of marketing, said “the electronics hobby is booming.
Our study found an underlying passion for electronics that builds the kinds of skills that make the American
economy strong.”5 Of the 1,700 hobbyists surveyed, 68 per cent believed that their hobby was a key part of
building the American economy.6

POLITICS AND THE USD/CAD EXCHANGE RATE

Political interactions between the United States and Canada had an important effect on the value of the
currencies.7 Since his inauguration in 2017, US President Donald Trump had emphasized a campaign
promise he had made to Americans, saying that his administration would take an “America-first” view,
prioritize American jobs, build up the American economy, and protect American industry from foreign
competition.8 For BusBoard, the potential effect of these policy priorities was not certain.9 If the United
States were to levy increased tariffs on Canadian imports, the value of the USD would likely change. There
was also debate in the United States regarding import tariffs on goods originating in China.10 It was possible
that the US government would levy tariffs on more than US$30 billion worth of Chinese imports, an action
that would reduce China’s long-standing advantage as a low-cost producer.11 Expectations of this tariff
increase had already caused manufacturers in Taiwan to look more attractive than they had under previous
tariff regimes. For a North American customer, it was relatively uncomplicated to switch from a Chinese
manufacturer to a Taiwanese manufacturer, thereby maintaining low-cost production and avoiding the
possibility that new tariffs might increase the cost of goods.
Page 3 9B20N020

New tariffs could increase BusBoard’s cost of goods in USD, but the potential impact was uncertain because

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
most of BusBoard’s purchases passed through Canada.12 Inventory was purchased, repackaged, and shipped
out of Canada without changing the harmonized sales code that served as identification for US tariff
imposition decisions.

The value of the USD was an important consideration for Canadian companies that did business in the
United States, and market processes affected the exchange rate between the two currencies. Despite the
constant change in relative values, it was easy for Patti to manage USD transactions from 2010 to 2013
because the exchange rate had remained close to par, making the company’s forecasts in CAD more reliable.
In 2016, the USD/CAD exchange rate was 0.67, which meant that a US$100 expenditure translated to
approximately CA$149.13 Between January and May of 2017, the USD/CAD exchange rate remained
relatively close to 0.74 (see Exhibit 1).

Trade between the United States and Canada was significant. In 2018, the United States imported US$353.6
billion worth of merchandise from Canada and exported US$360.5 billion of merchandise to Canada.14
Export Development Canada stated that in 2016, the United States and Canada had the largest trading
relationship in the world, with 75 per cent of Canada’s exports destined for the United States.15 A small

Use outside these parameters is a copyright violation.

company like BusBoard did not have the capacity to affect the value of the two currencies, yet it was
imperative to the company’s survival to control for the volatility. In 1969, Canada’s prime minister, Pierre
Elliot Trudeau, summarized the relationship between the two countries by saying, “Living next to you is in
some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can
call it that, one is affected by every twitch and grunt.”16 The much larger United States had a significant
economic impact on Canada and, therefore, on BusBoard’s profitability.

The primary factors that influenced the exchange rate between the USD and the CAD included oil prices,
monetary policy decisions made by the two countries’ central banks, and inflation. When the price of oil
was high, Canadian companies’ revenues in USD increased, and large amounts of USD flowing into Canada
tended to strengthen the CAD. When the Bank of Canada made a monetary policy decision such as raising
interest rates, foreign investment in Canada tended to become more attractive, increasing demand for the
CAD and its value relative to other currencies.17 Inflation rates also contributed to differences between the
trading value of USD and CAD. Countries with low inflation rates were likely to attract foreign investment
capital, whereas countries with high inflation rates were more likely to repel foreign investment capital.18

PURCHASES IN USD

BusBoard’s primary suppliers were located in South Korea and Taiwan, and some of these suppliers had
factories in China. BusBoard settled all of its transactions with non-Canadian suppliers in USD. These
transactions had totalled 85 per cent of BusBoard’s annual purchases in 2018. In a recent transaction
between BusBoard and one of the company’s Taiwanese manufacturers, the total value of the purchase was
US$24,776, and BusBoard agreed to pay 50 per cent upfront (see Exhibit 3). At contract initiation, the
USD/CAD exchange rate was 0.748. If BusBoard were to pay immediately, the cost in CAD of the 50 per
cent upfront payment would be CA$16,562. For these types of transactions, Patti was concerned about the
potential exchange rate when the remaining 50 per cent came due, and she wondered what the effect would
be if the CAD were to strengthen or weaken. If she delayed payment and the exchange rate were to move
in BusBoard’s favour, BusBoard could save money. Her choices were to either keep that money in a US
bank account until payment was required, or trade it immediately and pay a USD/CAD exchange rate of
0.748. BusBoard had always based currency transaction decisions regarding customers in the United States
on intuition and had never actively hedged its exposure. In a transaction between BusBoard and one of the
Page 4 9B20N020

company’s Korean manufacturers, BusBoard was subject to similar risks: between paying 50 per cent

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
upfront and paying the balance upon shipping, the USD/CAD exchange rate could fluctuate significantly,
meaning that the cost of the goods in CAD could substantially increase or decrease (see Exhibit 4).

SALES IN USD

BusBoard’s sales revenues were primarily denominated in USD because a major portion of the company’s
service and product sales occurred in the United States. In the management meeting, Patti described
transactions in the company’s history when the exchange rate was at or near par and the company was able
to convert USD to approximately the same amount in CAD, absorbing insignificant gains or losses on each
transaction. In contrast, in late 2014, the company made a trade and converted US$5,000 at a USD/CAD
exchange rate of 0.81. The US$5,000 payment translated into a CA$6,172 deposit in the company’s bank
account. The exchange rate had the potential to put the company in an excellent position on its foreign sales.
If the USD were to decline in value relative to the CAD, and if this weakening were to be greater than
expected or were to last longer than expected, the value of BusBoard’s revenues in CAD would decline as
well. In a sense, a strong USD relative to the CAD was like free revenue: the stronger the USD, the greater
the gain when converting USD receipts to CAD.

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Another consideration was the elasticity of the company’s USD sales relative to changes in exchange rates.
The USD had been quite strong relative to the CAD, and the company’s cash flows had improved. If the
CAD strengthened in the future, Patti thought that price adjustments might be necessary. Price adjustments
were her usual response to this type of situation. BusBoard had made some price adjustments at a time
when the CAD was trading above par with the USD, but this had not happened recently. If BusBoard
increased its prices, it would be difficult to forecast how the market would respond. Patti wondered if
customers would continue to purchase from BusBoard, choosing to remain loyal to the company’s quality
and after-sales service while ignoring price changes related to exchange rates. She also wondered if
customers might switch to lower-cost alternatives sourced from countries where exchange rates were more
favourable for US purchasers.

In analyzing BusBoard’s hedging activities and evaluating alternative hedging activities, it was also
important to consider the money that was available for conversion to CAD after expenses. The margins on
a plastic enclosure that BusBoard manufactured and sold were good proxies for the margins on BusBoard’s
other products (see Exhibit 5).

POTENTIAL HEDGING OPPORTUNITIES

BusBoard’s size presented a challenge to hedging currency-exchange risk. Foreign-exchange contracts

were based on a notional amount of US$100,000, which was too large for the company’s needs.19 There
were, however, contracts available for smaller notional amounts from the Chicago Mercantile Exchange
(CME). CME offered e-micro USD/CAD futures contracts based on an amount of CA$10,000, with a
minimum tick size of 0.0001 USD/CAD (US$1.00 per contract). E-micro futures were exchange traded and
intended for smaller accounts.20 Two potentially relevant e-micro futures contracts were available. The first
contract, priced at 0.7595 USD/CAD, expired on the business day immediately preceding the third
Wednesday in September 2019.21 The second contract, priced at 0.7597 USD/CAD, expired on the business
day immediately preceding the third Wednesday in December 2019.22

BusBoard could consider forward exchange contracts as a method for hedging the company’s exposure to
changes in the USD/CAD exchange rate. Using the services of a foreign-exchange company, BusBoard
might be able to use these contracts to determine the value of its USD purchases and sales in advance, but
Page 5 9B20N020

Patti felt that the company’s typical transactions were not large enough for this solution to be viable.23

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
Generally, forward contracts were negotiated on large transaction values, involving market participants that
were quite large themselves. BusBoard’s typical transaction was less than CA$20,000, but from time to
time, the company initiated transactions that were in the CA$30,000–CA$50,000 range.

Given BusBoard’s lack of familiarity and experience with these types of contracts, the company’s long-
term business consultant provided a summary during a meeting at the Calgary office. The consultant
described forward and futures contracts as follows:

Forward contracts are used for two parties to commit to a delivery price at a future time. Neither
the seller (short) nor the buyer (long) knows in advance what the market price will be, so both
parties assume risk. The short party agrees to sell at a future time at a price that is determined at
contract initiation. If the price goes up, the short party loses. The long party agrees to buy at a future
time at a price that is determined now. If the price goes down, the long party loses. With forward
contracts, settlement occurs when the contract matures. Futures contracts share some similarities
with forward contracts, but futures contracts are standardized, traded on an exchange, and mark to
market. Marking to market means that if prices change between contract initiation and settlement,

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then one of the parties will make a payment to the other in order to make up the difference. Price
changes are settled day by day rather than all at once, as with forward contracts. This reduces the
risk of default by either party, although the total amount paid or received is the same. There can be
significant opportunity loss with forwards and with futures.

Another strategy that BusBoard could implement to manage its exposure to the USD would be to use
options on the USD. Available from the Montréal Exchange (MX), one MX contract represented
US$10,000. 24 Call options and put options were available on the USD (see Exhibit 6). Since the concept of
using calls and puts to manage currency-exchange risk was new to the company’s owners, the consultant
also provided a brief summary of options on currency, as follows:

A currency option gives the option buyer the right but not the obligation to purchase or sell a
currency at a contract price on or before a particular date. The currency’s exchange value and the
maturity date of the agreement are determined in a contract – if the value of the currency changes
after the option is purchased, the change in value has no impact on the contract price. A premium
(i.e., a “fee”) is required when the contract is purchased, and the buyer can lose all of this premium
if the value of the currency does not change as expected.

TIMING EXCHANGE TRANSACTIONS

Patti believed that it was good for BusBoard to carry a significant balance in the company’s USD account as
a float for future transactions, so BusBoard used the USD bank account to pay the company’s suppliers and
to receive payments from customers. On an as-needed basis, Patti would convert the amount that the company
needed to cover its CAD purchases and payroll, leaving a balance in the USD account for inventory purchases.
At times when the company did not have enough cash to cover CAD expenses and payroll, she would then
convert USD cash to CAD. For short-term cash shortfalls, Patti used BusBoard’s USD line of credit for
inventory purchases and to pay the interest charges until deposits brought it back to a positive balance. When
the rate of return that BusBoard earned on the conversion of USD to CAD was more than the interest on the
company’s line of credit, it made sense to use the line of credit for short-term borrowing.
Page 6 9B20N020

EXHIBIT 1: HISTORICAL USD TO CAD DAILY EXCHANGE RATE

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
USD Value Relative to CAD
1.15
1.05
Exhange Rate

0.95
0.85
0.75
0.65
6/29/07 11/10/08 3/25/10 8/7/11 12/19/12 5/3/14 9/15/15 1/27/17 6/11/18
Month/Day/Year

Source: “Daily Exchange Rates Lookup,” Bank of Canada, accessed June 24, 2019, www.bankofcanada.ca/rates/exchange/daily-

Use outside these parameters is a copyright violation.

exchange-rates-lookup/.

EXHIBIT 2: BUSBOARD PROTOTYPE SYSTEMS LTD. PRODUCT LINES

A breadboard was a design (prototyping) platform for electronics and test circuits that did not require soldering. Electronic
components were connected by inserting their terminals or leads into the holes in the breadboard and then connecting the
wires as needed. Breadboards allowed for quick changes of components, which could shorten the prototyping process.
 Page 7

Source: Company files.

Source: Company files.

Note: Supplier’s identity redacted.
EXHIBIT 2 (CONTINUED)

EXHIBIT 3: TAIWANESE SUPPLIER INVOICE

9B20N020

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
Use outside these parameters is a copyright violation.
 Page 8

EXHIBIT 4: KOREAN SUPPLIER INVOICE

9B20N020

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
Use outside these parameters is a copyright violation.
 Page 9

Source: Company files.

Note: Supplier’s identity redacted.
EXHIBIT 4 (CONTINUED)
9B20N020

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
Use outside these parameters is a copyright violation.
Page 10 9B20N020

EXHIBIT 5: PLASTIC ENCLOSURE SALES, FINANCIAL DETAILS (IN US$)

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
Sales and Costs: Plastic Electronics Enclosures
Units sold 625
Sales price $ 11.28

Expense
Per unit cost $ 3.97
Freight from vendor $ 0.20
Packaging costs
Product insert $ 0.01
Bag $ 0.05
Labour $ 0.08
Marketing costs $ 0.29
Freight to warehouse $ 0.70
Sales and fulfillment fees $ 3.13
Total expenses $ 8.42
Earnings before interest and tax, per enclosure $ 2.86

Use outside these parameters is a copyright violation.

Source: Company files.
Page 11 9B20N020

EXHIBIT 6: CALL AND PUT OPTIONS AVAILABLE (IN US$)

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
Montréal Exchange (MX) call options on USD, June 3, 2019, symbol USX

Strike Expiry Date Bid Price Ask Price Last Price Settlement
130 06/21/2019 4.34 4.45 4.45 4.45
135 6/21/2019 0.29 0.40 0.40 0.40
138 6/21/2019 0.00 0.07 0.07 0.07
130 7/19/2019 4.28 4.39 4.39 4.39
135 7/19/2019 0.63 0.74 0.74 0.74
138 7/19/2019 0.07 0.18 0.18 0.18
130 8/16/2019 4.32 4.39 4.39 4.39
135 8/16/2019 0.92 0.99 0.99 0.99
138 8/16/2019 0.24 0.31 0.31 0.31
130 9/20/2019 4.36 4.49 4.49 4.49
135 9/20/2019 1.16 1.29 1.29 1.29
138 9/20/2019 0.40 0.53 0.53 0.53
120 12/20/2019 13.81 13.94 13.94 13.94
130 12/20/2019 4.66 4.79 4.79 4.79

Use outside these parameters is a copyright violation.

135 12/20/2019 1.77 1.90 1.90 1.90
138 12/20/2019 0.91 1.04 1.04 1.04
140 12/20/2019 0.57 0.70 0.70 0.70
145 12/20/2019 0.15 0.28 0.28 0.28

MX put options on USD, June 3, 2019, symbol USX

Strike Expiry Date Bid Price Ask Price Last Price Settlement
130 6/21/2019 0.00 0.06 0.06 0.06
135 6/21/2019 0.89 1.00 1.00 1.00
138 6/21/2019 3.56 3.67 3.67 3.67
130 7/19/2019 0.00 0.10 0.10 0.10
135 7/19/2019 1.33 1.44 1.44 1.44
138 7/19/2019 3.76 3.87 3.87 3.87
130 8/16/2019 0.10 0.17 0.17 0.17
135 8/16/2019 1.69 1.76 1.76 1.76
138 8/16/2019 3.99 4.06 4.06 4.06
130 9/20/2019 0.23 0.36 0.36 0.36
135 9/20/2019 1.99 2.12 2.12 2.12
138 9/20/2019 4.22 4.35 4.35 4.35
120 12/20/2019 0.00 0.08 0.08 0.08
130 12/20/2019 0.71 0.84 0.84 0.84
135 12/20/2019 2.77 2.9 2.90 2.90
138 12/20/2019 4.87 5.00 5.00 5.00
140 12/20/2019 6.51 6.64 6.64 6.64
145 12/20/2019 11.05 11.18 11.18 11.18
Source: “Historical Data,” Montréal Exchange, accessed February 14, 2019, https://m-
x.ca/nego_fin_jour_en.php?symbol=USX&from=2017-04-28&to=2017-05-02#cotes.
Page 12 9B20N020

ENDNOTES

Authorized for use only in the course Seminar in International Finance at California State University - Fullerton taught by Joseph Greco from Aug 24, 2020 to Dec 11, 2020.
1
“Daily Exchange Rates Lookup,” Bank of Canada, accessed June 24, 2019, www.bankofcanada.ca/rates/exchange/daily-
exchange-rates-lookup/.
2
“Jameco Electronics Hobbyist Study: Electronics Skills Are Critical to Fueling American Economy,” Business Wire, June 2,
2015, accessed April 12, 2018, www.businesswire.com/news/home/20150602005278/en/Jameco-Electronics-Hobbyist-
Study-Electronics-Skills-Critical.
3
“2015 Economic Growth Strongest Since 2005,” Reuters, July 28, 2017, accessed June 12, 2018,
www.reuters.com/article/us-usa-economy-gdp/2015-economic-growth-strongest-since-2005-idUSKBN1AD1JM.
4
“Jameco's Great American Electronics Hobbyist Census,” YouTube video, 3:02, posted by “Jameco Electronics,” August 6,
2015, accessed April 14, 2020, www.youtube.com/watch?v=Tdi8a3R5M9M&feature=emb_logo; Jameco Electronics
(website), accessed April 12, 2018, www.jameco.com.
5
“Jameco Electronics Hobbyist Study: Electronics Skills Are Critical to Fueling American Economy,” op. cit.
6
Barbara Jorgensen, “Electronics Hobbyists Fuel Economy,” EPS News, June 2, 2015, accessed April 12, 2018,
https://epsnews.com/2015/06/02/electronics-hobbyists-fuel-economy/.
7
The Canadian Press, “Canadian Dollar Lower after Trump Attacks Trudeau over Tariffs,” CBC News, June 11, 2018,
accessed April 13, 2020, www.cbc.ca/news/business/loonie-canadian-dollar-trump-1.4700831.
8
Lily Rothman, “The Long History behind Donald Trump’s ‘America First’ Foreign Policy,” Time, March 28, 2016, accessed
April 14, 2020, https://time.com/4273812/america-first-donald-trump-history/.
9
“The Road to a New NAFTA: A Recap,” Globe and Mail, updated October 1, 2018, accessed October 15, 2018,
www.theglobeandmail.com/politics/article-the-road-to-a-new-nafta-a-recap.
10
Debby Wu, “Trump’s Tariffs Push Electronics from China to Southeast Asia,” Bloomberg, August 1, 2018, accessed October

Use outside these parameters is a copyright violation.

16, 2018, www.bloomberg.com/news/articles/2018-08-01/trump-s-tariffs-push-electronics-from-china-to-southeast-asia.
11
David J. Lynch, Danielle Paquette, and Emily Rauhala, “U.S. Levies Tariffs on $34 Billion Worth of Chinese Imports,” Washington
Post, July 6, 2018, accessed June 24, 2019, www.washingtonpost.com/world/trumps-trade-war-with-china-is-finally-here--and-it-
wont-be-pretty/2018/07/05/0e43048c-802c-11e8-b9f0-61b08cdd0ea1_story.html?noredirect=on&utm_term=.7378a342f27e.
12
David Israelson, “Trade Tensions’ Effect on Interest Rates Gives Businesses Bumpy Ride,” Globe and Mail, updated June
25, 2018, accessed October 15, 2018, www.theglobeandmail.com/featured-reports/article-trade-tensions-effect-on-interest-
rates-gives-businesses-bumpy-ride/.
13
“US Dollars (USD) to Canadian Dollars (CAD) Exchange Rate for January 19, 2016,” Exchange-Rates.org, accessed June
11, 2018, www.exchange-rates.org/Rate/USD/CAD/1-19-2016.
14
“Canada,” Office of the United States Trade Representative, accessed June 24, 2019, https://ustr.gov/countries-
regions/americas/canada.
15
“United States,” Export Development Canada, accessed June 4, 2018, www.edc.ca/en/country-info/country/united-
states.html.
16
“Sleeping with a Very Cranky Elephant: The History of Canada-U.S. Tensions,” CBC News, June 15, 2018, accessed
October 15, 2018, www.cbc.ca/radio/thesundayedition/the-sunday-edition-june-17-2018-1.4692469/sleeping-with-a-very-
cranky-elephant-the-history-of-canada-u-s-tensions-1.4699017.
17
Solomon Israel, “After Bank of Canada Hikes Rates, What Happens to the Canadian Dollar?,” CBC News, July 8, 2017,
accessed February 6, 2019, www.cbc.ca/news/business/loonie-bank-of-canada-interest-rates-1.4191573.
18
Alexandra Twin, “6 Factors That Influence Exchange Rates,” Investopedia, April 3, 2020, accessed June 4, 2018,
www.investopedia.com/articles/basics/04/050704.asp.
19
“Canadian Dollar Option (American) Contract Specs,” CME Group, accessed April 14, 2020,
www.cmegroup.com/trading/fx/g10/canadian-dollar_contractSpecs_options.html?optionProductId=50#optionProductId=50
20
“Micro CAD/USD Futures Contract Specs,” CME Group, accessed February 13, 2019, www.cmegroup.com/trading/fx/e-
micros/e-micro-canadian-dollar-us-dollar_contract_specifications.html.
21
“Micro CAD/USD Futures Quotes,” CME Group, accessed June 24, 2019, www.cmegroup.com/trading/fx/e-micros/e-micro-
canadian-dollar-us-dollar.html.
22
Ibid.
23
“Forward Exchange Contracts for Money Transfers,” OFX, accessed February 1, 2019, www.ofx.com/en-ca/money-
transfer/forward-contracts/.
24
“Options on the US Dollar (USX),” Montréal Exchange, accessed February 14, 2019, https://m-
x.ca/produits_options_devises_en.php.