| Course | GF584 Treasury Management II |
|---|---|
| Unit | Unit 1 |
| Paper type | Discussion board post |
| Length | About 550 words, 3 pages double-spaced |
| Format | APA 7 discussion post |
| School | Purdue University Global |
| Program | MS in Finance |
| Updated | October 2026 |
Free sample paper for GF584 Unit 1
A Won Exposure Hidden in a Dollar Invoice: A Unit 1 Post on an Unmeasured Risk
GF584 · Unit 1 Discussion
Posted by [Student Name]
The dryer maker, its supplier, every figure and the classmates are composite; the articles and textbook cited are real.
Initial Post
I work in procurement at an Iowa company that builds grain dryers and bin aeration systems for farms and elevators. Our largest single purchase is fan motors and burner controls from a supplier in South Korea, about $5.2 million a quarter. The invoices are in dollars, and for years everyone in the building, me included, treated the contract as having no currency risk.
The clause. Reading the contract for a renewal last month, I found a price adjustment term. If the won moves more than 3 percent from a base rate of 1,375 per dollar, measured over the quarter, the next quarter's dollar price is reset by the amount of the move beyond 3 percent. The band's edges sit at about 1,335.0 won per dollar on the strong side and 1,417.5 on the weak side.
Why our register reads zero. Treasury builds its exposure register from the currency field on invoices and contracts. Every invoice from this supplier carries a dollar code, so the register shows no won position at all. The exposure lives in the wording of the clause, not in any account.
Sizing it.
1. Won 5 percent stronger: the quarterly bill rises about $104,000.
2. Won 10 percent stronger, near 1,250 per dollar: about $364,000 a quarter, or $1.456 million a year.
3. Won 15 percent stronger: about $624,000 a quarter.
A contract can be invoiced in dollars and still be priced in won: our register reads zero because it looks at the currency code, while the clause moves our cost by about $1.456 million a year if the won strengthens 10 percent.
The clause cuts both ways. A won weaker by the same amounts would lower our bill by the same figures, so this is a two-sided exposure rather than a one-way cost.
Research on currency exposure defines it by how a firm's cash flows or value move with a rate, not by what currency an invoice is written in, which is exactly the gap our register has (Adler & Dumas, 1984). Textbooks on multinational finance describe price adjustment clauses as a common way suppliers pass currency risk to buyers while keeping invoices in dollars (Eiteman et al., 2016).
My question for the group: which contract at your firm is billed in one currency and priced in another?
Reply to Priya
Priya, you named your hospital's euro-priced imaging service contract. Is the fee actually paid in euros, or converted at a fixed rate when the contract is signed? If it is fixed at signing, the cash exposure may end once the contract starts, and only renewals would carry risk. That would make it a much smaller number than the annual spend suggests.
Reply to Marcus
Marcus, your firm sells to a Canadian distributor in dollars, so you said there is no exposure. Does the distributor's demand fall when the Canadian dollar weakens? If orders drop, the cash moves with the rate even though the invoice never changes, which is the kind of exposure Adler and Dumas (1984) would count.
References
Adler, M., & Dumas, B. (1984). Exposure to currency risk: Definition and measurement. Financial Management, 13(2), 41-50. https://doi.org/10.2307/3665446
Eiteman, D. K., Stonehill, A. I., & Moffett, M. H. (2016). Multinational business finance (14th ed.). Pearson.
Reading the GF 584 Unit 1 instructions
The opening GF584 discussion asks you to identify an exposure your employer carries but has never sized. Describe it from the document where it lives, such as a contract clause, a price list or a loan agreement, in plain words. Explain why existing reporting misses it. Size it with at least two or three scenarios, stating the move tested and the result in dollars over a quarter and a year. Note whether the exposure is one-sided or symmetric, and where any thresholds or bands begin. Connect the example to a definition of currency or rate exposure from the readings. End with a question that sends classmates to their own contracts. Replies should test whether a classmate's example actually changes cash. Cite sources in APA 7.
How the GF 584 Unit 1 example is put together
The writer's role in procurement at the dryer maker opens the post, followed by a plain description of the supplier's price clause and its band edges near 1,335.0 and 1,417.5 won per dollar. A paragraph explains why the register reads zero: positions are captured from invoice currency codes. A numbered list sizes three won moves, from about $104,000 to $624,000 a quarter. The highlighted sentence contrasts the currency code with the clause. A sentence notes that a weaker won lowers the bill by the same amounts. Adler and Dumas anchor the definition of exposure, and Eiteman and colleagues describe price adjustment clauses. Replies ask Priya whether her euro-priced contract fixes the rate at signing and Marcus whether his Canadian distributor's orders fall with its currency.
Reading the GF584 Unit 1 grading rubric
Credit on this opening GF584 post depends first on a clearly identified exposure described from its source document. Graders look for sizing with stated scenarios and results in dollars, attention to whether the exposure is symmetric, and an explanation of why it has gone unmeasured. Linking the example to a published definition of exposure shows the student understands that exposure is about cash flows, not invoice currency. Instructors in the MS in Finance program reward a closing question that pushes classmates toward their own contracts. Replies earn marks when they test whether a classmate's example truly moves cash rather than agreeing with it. Listing Adler and Dumas and the multinational finance text in APA 7, inside the word guidance, finishes the marks.
GF584 Unit 1 help: mistakes that cost points
Many first GF584 posts name a foreign bank account or a subsidiary and stop there, without sizing anything. Others give one sensitivity figure with no stated move or horizon, so readers cannot check it. Exposures hidden in dollar contracts, such as price adjustment clauses or competitors' costs, are often missed because students look for foreign currency codes. Thresholds and bands are ignored, which overstates small moves. Replies agree with classmates instead of asking whether the cash really changes. Whatever exposure you describe, keep the order: source document, why reporting misses it, scenarios with results, symmetry, a published definition and a question about classmates' contracts.
Get a GF584 Unit 1 example written to your instructions
Pick an exposure your employer has but does not track, or request an invented firm where the instructions permit it; the discussion wording and rubric for this first unit should come too. Sized with stated assumptions and accompanied by replies when those are graded, a custom post returns within 24-48h, and the first costs nothing. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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GF584 Unit 1 questions, answered
What if my employer has no foreign operations?
Most firms still carry some exposure they never measure: a supplier whose prices follow a foreign currency, a commodity input, a floating-rate loan, a competitor whose costs are set abroad. The post only needs one named exposure and a rough size. If your employer is purely domestic, an interest rate or commodity example fits the prompt as well as a currency does.
How precise does the sizing need to be?
Rough is acceptable at this stage, as long as the assumptions are visible. State the amount at risk, the size of move you tested and why, and the result. A single sensitivity figure with its inputs is enough for an opening post; the course's later units introduce the more formal measures, and the first board is not expected to use them.
Can the post name the supplier or customer involved?
It is safer not to. Describe the counterparty by type and country, and round or scale any figures drawn from real contracts. Graders are interested in the structure of the exposure, not the identity of the parties, and many employers treat supply terms as confidential. A sentence noting that details were altered keeps the post honest.
Where can I find a free GF584 Unit 1 sample paper?
This page holds a complete GF584 Unit 1 discussion post sizing a won price clause inside a dollar-invoiced motor contract, with three scenarios, two replies and APA 7 references.
Why does the treasury register show no won exposure?
The register is built from the currency code on invoices and contracts, and every invoice from the supplier is in dollars. The exposure sits in the price clause, which no system reads.