Ch11Managing Transaction Exposure(国际金融管理山东大学,秦风鸣)概要1.ppt

Managing Transaction Exposure Chapter Objectives To identify the commonly used techniques for hedging transaction exposure; To explain how each technique can be used to hedge future payables and receivables; To compare the advantages and disadvantages of the identified hedging techniques; and Chapter Objectives To suggest other methods of reducing exchange rate risk when hedging techniques are not available. Transaction Exposure Transaction exposure exists when the future cash transactions of a firm are affected by exchange rate fluctuations. When transaction exposure exists, the firm faces three major tasks: Identify its degree of transaction exposure, Decide whether to hedge its exposure, and Choose among the available hedging techniques if it decides on hedging. Identifying Net Transaction Exposure Centralized Approach - A centralized group consolidates subsidiary reports to identify, for the MNC as a whole, the expected net positions in each foreign currency for the upcoming period(s). Note that sometimes, a firm may be able to reduce its transaction exposure by pricing some of its exports in the same currency as that needed to pay for its imports. Techniques to Eliminate Transaction Exposure Hedging techniques include: Futures hedge, Forward hedge, Money market hedge, and Currency option hedge. MNCs will normally compare the cash flows that could be expected from each hedging technique before determining which technique to apply. Techniques to Eliminate Transaction Exposure A futures hedge involves the use of currency futures. To hedge future payables, the firm may purchase a currency futures contract for the currency that it will be needing. To hedge future receivables, the firm may sell a currency futures contract for the currency that it will be receiving. Techniques to Eliminate Transaction Exposure A forward hedge differs from a futures hedge in that forward contracts are used instead of futures contract to lock in the future exchange rate at which th