全美顶级MBA教材《跨国公司财务管理》（权威工商管理教材）（第六到第十章）.ppt

PART II.MANAGING TRANSLATION EXPOSURE I. MANAGING TRANSLATION EXPOSURE A. Choices faced by the MNC: 1. Adjusting fund flows altering either the amounts or the currencies of the planned cash flows of the parent or its subsidiaries to reduce the firm’s local currency accounting exposure. MANAGING TRANSLATION EXPOSURE 2. Forward contracts reducing a firm’s translation exposure by creating an offsetting asset or liability in the foreign currency. MANAGING TRANSLATION EXPOSURE 3. Exposure netting a. offsetting exposures in one currency with exposures in the same or another currency b. gains and losses on the two currency positions will offset each other. MANAGING TRANSLATION EXPOSURE B. Basic hedging strategy for reducing translation exposure: 1. increasing hard-currency(likely to appreciate) assets 2. decreasing soft-currency(likely to depreciate) assets 3. decreasing hard-currency liabilities 4. increasing soft-currency liabilities MANAGING TRANSLATION EXPOSURE How to increase soft-currency liabilities? reduce the level of cash, tighten credit terms to decrease accounts receivable, increase LC borrowing, delay accounts payable, and sell the weak currency forward. PART IlI. MANAGING TRANSACTION EXPOSURE I. METHODS OF HEDGING A. Risk shifting B. Currency risk sharing C. Currency collars D. Cross-hedging E. Exposure netting F. Forward market hedge G. Foreign currency options MANAGING TRANSACTION EXPOSURE A. RISK SHIFTING 1. home currency invoicing 2. zero sum game 3. common in global business 4. firm will invoice exports in strong currency, import in weak currency 5. Drawback: it is not possible with informed customers or suppliers. MANAGING TRANSACTION EXPOSURE B. CURRENCY RISK SHARING 1. Developing a customized hedge contract 2. The contract typically takes the form