ch11MEASURING AND MANAGING ECONOMIC EXPOSURE(跨国公司财务管理Joseph F. Greco)概要1.pptVIP

Multinational Financial Management Alan Shapiro7th Edition J.Wiley Sons Power Points by Joseph F. Greco, Ph.D. California State University, Fullerton CHAPTER 11 MEASURING AND MANAGING ECONOMIC EXPOSURE CHAPTER OVERVIEW I. FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE II. THE ECONOMIC CONSEQUENCES OF EXCHANGE RATE CHANGES III. IDENTIFYING ECONOMIC EXPOSURE IV. CALCULATING ECONOMIC EXPOSURE V. AN OPERATIONAL MEASURE OF EXCHANGE RISK VI. MANAGING OPERATING EXPOSURE 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. FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE 2. Definitions: a. Accounting exposure impact on firm’s balance sheet b. Economic exposure 1.) Transaction 2.) Operating FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE THE REAL EXCHANGE RATE FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE B. Real Exchange Rates and Risk 1. Nominal v. real exchange rates: the real rate has been adjusted for price changes. FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE 3. SUMMARY a. the economic impact of a currency change depends on the offset by the difference in inflation rates or the real exchange rate. b. It is the relative price changes that ultimately determine a firm’s long-run exposure. PART II. THE ECONOMIC CONSEQUENCES OF EXCHANGE RATE CHANGES II. ECONOMIC CONSEQUENCES A. Transaction exposure 1. On-balance sheet 2. Off-balance sheet THE ECONOMIC CONSEQUENCES  OF EXCHANGE RATE CHANGES II. ECONOMIC CONSEQUENCES (con’t) B. Operating Exposure : real rate change 1. Pricing flexibility is key 2. Product differentiation 3. Substitution of inputs THE ECONOMIC CONSEQUENCES  OF EXCHANGE RATE CHANGES II. SUMMARY The sector of the economy in which the firm oper