Autumn2005- TBS 907-Lecture 10- International Finance

Any anticipated changes in the exchange rates would

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Unformatted text preview: in the firm's value. Economic exposure can be defined as the extent to which the value of the firm would be affected by unanticipated changes in exchange rates. Transaction Exposure Defined as the sensitivity of "realized" domestic currency values of the firm's contractual cash flows denominated in foreign currencies to unexpected exchange rate changes. Transaction exposure arises from fixed price contracting in a world of constantly changing exchange rates. Methods of Hedging Translation Exposure Market Methods Forward Contracts Futures Contracts Options M...
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This note was uploaded on 07/10/2009 for the course FIN FIN taught by Professor Dr. during the Spring '09 term at Baptist College of Health Sciences.

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