International Finance 1 min read
Foreign Currency Futures & Options
Depending on the selection of buying or selling the numerator or denominator of a currency pair, the derivative contracts are…
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International Finance 2 min read
Managing Economic Exposure
The economic exposure risks can be removed through operational strategies or currency risk mitigation strategies. Operational strategies ● Diversifying production facilities and markets for…
International Finance 1 min read
Determining Economic Exposure
The economic exposure is usually determined by two factors − ● Whether the markets where the company inputs and sells its products…
International Finance 2 min read
Calculating Economic Exposure
Foreign asset or overseas cash flow value fluctuates with the exchange rate changes. We know from statistics that a regression…
International Finance 1 min read
Benefits and Risks of Financial Globalization
One of the major benefits of Financial Globalization is that the risk of a “credit crunch” has been reduced to…
International Finance 2 min read
Economic Exposure – An Example
Consider a big U.S. multinational with operations in numerous countries around the world. The company’s biggest export markets are Europe…
International Finance 1 min read
Types of Exposure
Companies are exposed to three types of risk caused by currency volatility − ● Transaction exposure − Exchange rate fluctuations have an effect on…
Advanced Concepts 1 min read
Semiconductor Diode Notation
The notation most frequently used for semiconductor diodes is provided in Fig. 1.40. For most diodes any marking such as…
International Finance 1 min read
Exchange Rate Fluctuations
Exchange rate fluctuations affect not only multinationals and large corporations, but also small and medium-sized enterprises. Therefore, understanding and managing…
International Finance 4 min read
Exchange Rate Forecast: Models
Some important exchange rate forecast models are discussed below. Purchasing Power Parity Model The purchasing power parity (PPP) forecasting approach…
