国际财务管理课后习题答案chapter9.pdfVIP

CHAPTER 9 MANAGEMENT OF ECONOMIC EXPOSURE CHAPTER 9 MANAGEMENT OF ECONOMIC EXPOSURE SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS AND PROBLEMS QUESTIONS  QUESTIONS  1.  How would you define economic exposure to exchange risk?  1.  How would you define economic exposure to exchange risk?  Answer:  Economic exposure can be defined as the possibility that the firm’s cash flows and thus its  Answer:  Economic exposure can be defined as the possibility that the firm’s cash flows and thus its  market value may be affected by the unexpected exchange rate changes.  market value may be affected by the unexpected exchange rate changes.  2.  Explain the following statement: “Exposure is the regression coeff.i”cient 2.  Explain the following statement: “Exposure is the regression coeff.i”cient Answer:  Exposure to currency risk can be appropriately measured eb ys enthsitivity of the firm’s future  Answer:  Exposure to currency risk can be appropriately measured eb ys enthsitivity of the firm’s future  cash flows and the market value to random changes in exchange rates. Statistically, this sensitivity can be  cash flows and the market value to random changes in exchange rates. Statistically, this sensitivity can be  estimated by the regression coefficient. Thus, exposure can be said to be the regression coefficient.  estimated by the regression coefficient. Thus, exposure can be said to be the regression coefficient.  3.  Suppose that your company has an equity position in a French firm. Discuss the condition under which  3.  Suppose that your company has an equity position in a French firm. Discuss the condition under which  the dollar/franc exchange rate uncertainty does not constitute exchange exposure