Managing Transaction Exposure

Dec 17, 2012

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Managing Transaction Exposure

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Translation and Transaction Exposure

Translation and Transaction Exposure . International Corporate Finance P.V. Viswanath For use with Alan Shapiro “Multinational Financial Management”. Learning Objectives. To define translation and transaction exposure To describe the four principal currency translation methods.

1.52k views • 46 slides

FX Risk Management Transaction Exposure

FX Risk Management Transaction Exposure Overview The three major foreign exchange exposures Foreign exchange transaction exposure Pros and cons of hedging foreign exchange transaction exposure Alternatives of managing significant transaction exposure

1.83k views • 55 slides

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Translation and Transaction Exposure. Chapter 9. PART I. ALTERNATIVE MEASURES OF FOREIGN EXCHANGE EXPOSURE: Accounting and Economic Risk. I. ALTERNATIVE MEASURES A. TYPES 1. Accounting Exposure:

835 views • 35 slides

Transaction Exposure

Transaction Exposure. Foreign exchange exposure is a measure of the potential for a firm's profitability, net cash flow, and market value to change because of a change in exchange rates.An important task of the financial manager is to measure foreign exchange exposure and to manage it so as to maxi

608 views • 40 slides

Measuring and Managing Translation and Transaction Exposure

2. PART I. ALTERNATIVE MEASURES OF FOREIGN EXCHANGE EXPOSURE. I.ALTERNATIVE MEASURESA.TYPES1.Accounting Exposure:arises when reporting and consolidating financial statements requireconversion from subsidiary to parent currency(difficult to hedge an event that occurre

642 views • 24 slides

FX Risk Management Transaction Exposure

FX Risk Management Transaction Exposure. Overview The three major foreign exchange exposures Foreign exchange transaction exposure Pros and cons of hedging foreign exchange transaction exposure Alternatives of managing significant transaction exposure

1.18k views • 55 slides

Managing Transaction Exposure

8. Managing Transaction Exposure. Chapter Objectives This chapter will: A. Compare the commonly used techniques to hedge payables B. Compare the commonly used techniques to hedge receivables C. Explain how to hedge long-term transaction exposure

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Transaction Exposure

Transaction Exposure. Risk due to lags in payments Hedging strategies. Exposure. Transaction exposure changes in the value of outstanding contracts Operating exposure (economic exposure) change in the PV of the firm (real exchange rates) Translation exposure (accounting exposure)

583 views • 24 slides

Case 2 Hedging Transaction Exposure

Case 2 Hedging Transaction Exposure. Haowen Luo Peixin Zhang. Story. In June 2009, DW knows that it will have to pay JPY 200,000,000 for the Japanese parts in the future. Delivery expected to be in October 17, payment is due within 30 days of delivery, or before November 17. .

435 views • 25 slides

Hedging Transaction Exposure

Hedging Transaction Exposure. Forward Contracts. Forward contracts are purchases/sales of currencies to be delivered at a specific forward date (30,90,180, or 360 days) Example CAD/USD .7641 1 month .7583 3 months .7563 6 months .7537 12 months .7525.

553 views • 26 slides

Chap 11 Transaction Exposure

Chap 11 Transaction Exposure. Multinational Business Finance. Transaction Exposure. 0. Foreign exchange exposure is a measure of how a firm’s profitability , net cash flow , and market value will change because of a change in exchange rates.

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Managing Economic Exposure and Translation Exposure

12. Managing Economic Exposure and Translation Exposure. Chapter Objectives. Explain how an MNC’s economic exposure can be hedged Explain how an MNC’s translation exposure can be hedged. 2. Managing Economic Exposure.

620 views • 19 slides

Managing Transaction Risks

Managing Transaction Risks. Currency dispute (?) http://www.youtube.com/watch?v=E6occEOoTzY Interest rate parity (good) http://www.youtube.com/watch?v=Lt6W4Jy10FQ International fisher effect http://www.youtube.com/watch?v=XS5Utaati60 Purchasing power parity

1.22k views • 89 slides

Managing Transaction Exposure

11. Managing Transaction Exposure. Chapter Objectives. Compare the techniques commonly used to hedge payables Compare the techniques commonly used to hedge receivables Describe limitations of hedging

944 views • 30 slides

Managing Transaction Exposure

Managing Transaction Exposure. Exposure = Risk Managing Risk = “Hedging”. Types of FX Exposure. Hedging With…. Transaction Risk Example. Foreign RECEIVABLES: Boeing (USA) sells 747 Jet to British Airways (UK) for £10m payable in 1 year. Forward Market Hedge.

1.22k views • 24 slides

Managing accidental exposure

Managing accidental exposure . The first step: - implement universal precautions Also: - educate staff about all transmission routes - provide condoms in workplace. What is post-exposure prophylaxis? (PEP). Short-term treatment with antiretroviral drugs

232 views • 6 slides

Managing FX Exposure

Managing FX Exposure. Economic Exposure. Managing Economic Exposure. • If EE is significant => a firm should try to manage it. • Ideal Situation : A firm would like to have constant CFs at different exchange rates. If this is possible, there will not be EE. • Matching Inflows and Outflows

431 views • 23 slides

Managing FX Exposure

Managing FX Exposure. Transaction Exposure – FX Options. Managing TE – Hedging with FX Options. Review : Reading Newspaper Quotes PHILADELPHIA OPTIONS ( PHLX is the exchange) Wednesday , March 21, 2007 (Trading Date) Calls Puts =>( Contracts traded)

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HEDGING TRANSACTION EXPOSURE

HEDGING TRANSACTION EXPOSURE. Jennifer Nguyen Carlos Castillo. Case Background. Popescu, Hagi & Associates (PHA) Consulting firm Deals in specialized derivatives DW, Inc. Computer manufacturer No previous consistent hedging program Hires PHA to implement a plan.

480 views • 24 slides

Managing FX Exposure

Managing FX Exposure. Transaction Exposure. Managing TE. A Comparison of External Hedging Tools Transaction exposure : Risk from the settlement of transactions denominated in foreign currency. Example : Imports, exports, acquisition of foreign assets.

532 views • 24 slides

Transaction Exposure

Transaction Exposure. Transaction exposure measures gains or losses that arise from the settlement of existing financial obligations whose terms are stated in a foreign currency.

444 views • 22 slides

TRANSACTION EXPOSURE operating exposure and translation exposure

TRANSACTION EXPOSURE operating exposure and translation exposure. Multinational Business Finance Yinghong.chen@liu.se. 0. Transaction Exposure. Foreign exchange exposure is a measure of

1.47k views • 61 slides

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