国际货币和金融经济学课件04.pdfVIP

INTERNATIONAL MONETARY AND The Forward FINANCIAL ECONOMICS Currency Market Third Edition and Financial Arbitrage Joseph P. Daniels Managing Foreign Exchange Risk David D. VanHoose Copyright © South-Western, a division of Thomson Learning. All rights reserved. Foreign Exchange Risk • Foreign exchange risk is the risk that the value of a future receipt or obligation will change due to a change in foreign exchange rates. • Because these international transactions span time, foreign exchange risk can arise. 2 Sources of Risk • Transaction exposure: the risk that the domestic cost or proceeds of a transaction may change. • Translation exposure: (also known as accounting exposure) the risk that the translation of value of foreign-currency-denominated assets is affected by exchange rate changes. • Economic exposure: (also known as operating) the risk that exchange rate changes may affect the present value of future income streams. 3 Hedging and Speculating • Hedging is the act of offsetting an exposure to risk. • Covered Exposure refers to a foreign exchange risk that has been completely eliminated with a hedging instrument. 4 Long and Short Positions long long • Traders are lloonngg in a foreign currency if the value of their foreign-currency-denominated assets exceeds the value of their foreign- currency-denominated li