International Finance 2 min read
FDI and its Types
Strategically, FDI comes in three types − ● Horizontal − In case of horizontal FDI, the company does all the same activities abroad as…
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FDI – Definition
FDI, in its classic definition, is termed as a company of one nation putting up a physical investment into building…
International Finance 1 min read
Balance of Payments
It is important to measure the performance of an economy. Balance of Payment (BOP) is one way to do so. It shows the…
International Finance 1 min read
Foreign Direct Investment
Foreign direct investment (FDI) is an important factor in acquiring investments and grow the local market with foreign finances when…
International Finance 2 min read
Techniques to Reduce Economic Exposure
International firms can use five techniques to reduce their economic exposure − ● Technique 1 − A company can reduce its manufacturing costs by…
International Finance 3 min read
Economic Exposure – A Practical Example
Suppose you own and rent out a condominium in Europe. A property manager recruited by you can vary the rent,…
International Finance 2 min read
Regression Equation
Analysts can measure economic exposure by using a simple regression equation, shown in Equation 1. P = α + β.S + ε (1) Suppose, the United…
International Finance 1 min read
International Finance – Economic Exposure
Economic exposure is the toughest to manage because it requires ascertaining future exchange rates. However, economists and investors can take…
International Finance 2 min read
Hedging Translation Exposure
The above exhibit indicates that there is still enough translation exposure with changes in the exchange rate of the Mexican…
International Finance 2 min read
Translation Exposure – An Exhibit
The following exhibit shows the transaction exposure report for Cornellia Corporation and its two affiliates. Items that produce transaction exposure…
International Finance 1 min read
International Finance – Translation Exposure
Translation exposure, also known accounting exposure, refers to a kind of effect occurring for an unanticipated change in exchange rates. It can…
International Finance 2 min read
Operational Techniques for Managing Transaction Exposure
Operational strategies having the virtue of offsetting existing foreign currency exposure can also mitigate transaction exposure. These strategies include − ● Risk…