FINANCE
Answer the following issue by exploring currency and liquidity risk of portfolio of currencies. Answer is the current diversification of the portfolio appropriate or necessary as only 10% of SBE’s production comes from foreign production. Also the company plans on going public in a year so answer if the current situation is ideal or does it need to be adjusted from current market conditions and/or future expectations, and if any adjustments are needed, what are the adjustments to be made?

Given its involvement in other parts of the world, SBE maintains a portfolio of currencies. This portfolio accounts for approximately 40% of SBE’s liquidity. This portfolio consists of: 20% CAD; 20% NOK; 20% AUD; 10% EUR; 10% GBP; 10% JPY; and 10% other. Mevak has insisted that this portfolio is necessary to offset the weak USD. 10% of SBE’s production comes from foreign production.

Use as many or less sources you need to convey the point.