跨國企業(yè)和國際財務(wù)管理[文獻(xiàn)翻譯]-文庫吧在線文庫
【正文】 y stance of certain governments, such as the tighter monetary policy followed in the early days of the Thatcher administration in the UK. Indeed, the average volatility of exchange rates, which is in the region of 1015 per ent per year, is sufficient to eliminate the average profit margin for the typical multinational corporation.Interest rate variabilityInterest rate volatility has similarly affected corporate funding costs, cash flows, and net asset values since the early 1970s in the US, and although they subsequently declined, a change in policy by the Federal Reserve caused a sharp increase in both the level and volatility of rates in rates peaked in 1981, and then fell slowly. Since 1983, there have been four more US interest rate cycles. According to Jorion (1996 ), the increase in 1994 eliminated over $ dollar from fixed ine portfolios. Interest rates have also bee more and more volatile since many central banks began to abandon targeting interest rates as a policy objective in favour of targeting money supply growth or inflation. In the UK, interest rates shot up in the late 1980s and early 1990s due to inflationary pressures caused by a relaxation in monetary policy, but then fell substantially with sterling’s withdrawal from the ERM in September 1992.Equity market variabilityEquity markets have also bee extremely volatile. During the inflationary periods of the early 1970s, prices increased significantly only to fall sharply during the bear market of 19745 following a 300 per cent hike in the price of oil. A global recovery then ensued, with minor price reversals in 19823, and the market peaked in 1987. On Black Monday, 19 October 1987, prices plunged. US equities lost 23 per cent of their value, equivalent to over US $1 trillion in equity capital. This was followed by another recovery over the next ten years, sustained worldwide with the exception of Japan, where the Nikkei index fell from 39000 in 1989 to 17000 in 1992, a capital loss of US $ trillion. Finally from midto end 1997, the stock markets of Bangkok, Jakarta, Kuala Lumpur, and Manila lost US $370 billion, or 63 per cent of the four countryes’ bined GDP, while the Seoul stock market declined 60 per cent.Commodity price variability and other sources of increased riskCommodity prices, particularly those in primary product markets, have also been subject to large fluctuations since the 1970s,a trend established subsequent to the oil price rises of 19734. This variability also had spollover effects in other financial markets, particularly equity markets, thereby corroborating the view that it is fundamentally incorrect to treat financial markets in isolation from one anthor. Significant regulatory and legal changes, the globalization of the financial services industry, and legal changes, the globalization of the financial services industry, and the emergence of offshore financial activity have also increased financial risks. Finally, risk associated with the enhanced global risk has resulted from increased levels of world trade, major changes in trade policy, the economic and political transition of the former Soviet bloc, the growth of the EU, and the emergence of the Asian tiger economies as economic power.Country riskThis increasing financial market volatility has potentially important consequences for both the issue of international investment appraisal, and also the appropriate measure of country risk. Before we consider methodological issues relating to the measurement of country risk, there are some mentators who argue that country risk is diversifiable(unsystematic) and that there should b
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