andmanagingeconomicexposure(跨國公司財務管理--wenkub
2023-01-29 17:16:47 本頁面
【正文】 OF EXCHANGE RISK VI. MANAGING OPERATING EXPOSURE 3 PART I. FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE I. FOREIGN EXCHANGE RISK A. Economic exposure focuses on the impact of currency fluctuations on firm’s value. 1 . Expectations about the fluctuation must be incorporated in all basic decisions of the firm. 4 FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE 2. Definitions: a. Accounting exposure impact on firm’s balance sheet b. Economic exposure 1.) Transaction 2.) Operating 5 FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE THE REAL EXCHANGE RATE thtftt iiee)1()1(39。 B. sensitivity to exchange rate changes. 16 PART V. AN OPERATIONAL MEASURE OF EXCHANGE RISK V. NEED FOR A WORKABLE APPROACH A. Regression Analysis 1. Variables a. Independent: changes in parent’s cash flows b. Dependent: Average nominal exchange rate change. 17 AN OPERATIONAL MEASURE OF EXCHANGE RISK B. REGRESSION EQUATION approach based on the operational definition of the exchange risk faced by a parent or one of its affiliates: a pany faces exchange risk to the extent that variations in the dollar value of the unit’s cash flows are correlated with variations in the nominal exchange rate 18 AN OPERATIONAL MEASURE OF EXCHANGE RISK where CFt = CFt CFt1 and CFt is the dollar value of total affiliate(parent)cash flows in period t EXCHt = EXCHt EXCHt1 equals the average nominal exchange rate during period t u = a random error term
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