国际商务International_Business_(Charles_W.L._Hill_第七版)Chap009_The_Foreign_Exchange_Market教材教学课件.ppt

Economic Exposure Economic exposure is the extent to which a firm’s future international earning power is affected by changes in exchange rates Economic exposure is concerned with the long-term effect of changes in exchange rates on future prices, sales, and costs Classroom Performance System The extent to which a firm’s future international earning power is affected by changes in exchange rates is called a) Accounting exposure b) Translation exposure c) Transaction exposure d) Economic exposure Reducing Translation And Transaction Exposure To minimize transaction and translation exposure, firms can: buy forward use swaps leading and lagging payables and receivables (paying suppliers and collecting payment from customers early or late depending on expected exchange rate movements) Reducing Translation And Transaction Exposure A lead strategy involves attempting to collect foreign currency receivables early when a foreign currency is expected to depreciate and paying foreign currency payables before they are due when a currency is expected to appreciate A lag strategy involves delaying collection of foreign currency receivables if that currency is expected to appreciate and delaying payables if the currency is expected to depreciate Lead and lag strategies can be difficult to implement Reducing Economic Exposure To reduce economic exposure, firms need to: distribute productive assets to various locations so the firm’s long-term financial well-being is not severely affected by changes in exchange rates ensure assets are not too concentrated in countries where likely rises in currency values will lead to damaging increases in the foreign prices of the goods and services the firm produces Other Steps For Managing Foreign Exchange Risk In general, firms should: have central control of exposure to protect resources efficiently and ensure that each subunit adopts the correct mix of tactics and strategies distinguish between transaction and translation exposur