TAILIEUCHUNG - Lecture International finance: An analytical approach (3e): Chapter 13 - Imad A. Moosa

Chapter 13 - Foreign exchange risk management. The objectives of this chapter are: To explain why there is concern about foreign exchange risk; to illustrate how to manage short-term transaction exposure using forward hedging, futures hedging, money market hedging and option hedging; to illustrate other techniques of managing short-term and longterm transaction exposure; | Chapter 13 Foreign Exchange Risk Management Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Objectives To explain why there is concern about FX risk To illustrate how to manage transaction, economic and translation exposure 13- Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Hedging Hedging, which is the core risk management operation, is a process whereby a firm can protect itself from unanticipated changes in exchange rates and other sources of risk 13- (cont.) Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Hedging (cont.) The decision to hedge or not to hedge an uncovered or open foreign currency position is basically a speculative decision It all depends on the expected exchange rate or the movement of the exchange rate between the point in time when the decision is taken and when its effect materialises 13- Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Why is there no need to worry about FX risk? If international parity conditions hold, FX risk will not arise If it is possible to forecast exchange rates accurately, FX risk can be controlled Shareholders are naturally hedged though diversification 13- Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Why worry about FX risk? International parity conditions do not hold Forecasting exchange rates is rather difficult Hedging produces a more stable income stream 13- Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad .

• Tài chính doanh nghiệp
• International Finance
• Lecture International finance
• Tài chính quốc tế
• Bài giảng Tài chính quốc tế
• Foreign exchange risk
• Benefits of hedging
• International monetary system
• Exchange rate arrangements
• Eurocurrency market
• International banking
• Internal financing
• International short term financing
• International long term financing
• Foreign bonds
• Foreign direct investment
• International capital budgeting
• International bank loans
• Financial analysis
• Financial management
• Lecture Introduction to finance
• Financial markets
• International trade
• International business firms
• Financial manager
• Bond investment
• Equity investment
• International arbitrage
• Multipoint arbitrage
• Basel accords