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Unformatted text preview: C H A P T E R 10
Measuring Exposure to Exchange Rate Fluctuations Chapter Overview
A. Is Exchange Rate Risk Relevant? B. Types of Exposure C. Transaction Exposure D. Economic Exposure E. Translation Exposure Chapter 10 Objectives
This chapter will: A. Discuss the relevance of an MNC’s exposure to exchange rate risk B. Explain how transaction exposure can be measured C. Explain how economic exposure can be measured D. Explain how translation exposure can be measured 1. Purchasing Power Parity Argument: XR Risk is irrelevant because
a. according to purchasing power parity (PPP) theory, exchange rate movements are just a...
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