International Finance: Putting Theory Into Practice
504 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES DoItYourself problem 13.1 Verify that if the forward rate had been differen ...
13.3. MEASURING AND HEDGING OF OPERATING EXPOSURE 505 Table 13.2:Joint distribution ofS ̃TandCF ̃ Tfor the Freedonian Subsidiary ...
506 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES cash flow and conditional expectations remain as large as before. That is b ...
13.3. MEASURING AND HEDGING OF OPERATING EXPOSURE 507 Figure 13.5:Results for the non-linear exposure example Non-linear exposur ...
508 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES be made whether this correction will be based on the time series means, or ...
13.3. MEASURING AND HEDGING OF OPERATING EXPOSURE 509 (helped by pencil and ruler) or a regression with linear splines.^3 You st ...
510 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES transactions exposure) and operating exposure. Managers typically focus on ...
13.4. ACCOUNTING EXPOSURE 511 of the exposed cashflows themselves, and can even have a different sign: remember the Android exam ...
512 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES 13.4.1 Accounting Exposure of Contractual Forex Positions The issue of how ...
13.4. ACCOUNTING EXPOSURE 513 Table 13.4: Valuation usingIFRS, pure spot, and pure forward rules balance-sheet items gains (+) o ...
514 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES forward contract would already triggerM2Mcashflows while there are no rough ...
13.4. ACCOUNTING EXPOSURE 515 translation exposure, even though it deals with accounting data, can have an impact on cash flows ...
516 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES 13.4.3 The Choice of Different Translation Methods Accounting exposure aris ...
13.4. ACCOUNTING EXPOSURE 517 Table 13.5:Translating the Australian Balance Sheet into MTL Value values inmtlafter translation a ...
518 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES The Current/Non-Current Method The Current/Non-Current Method for translati ...
13.4. ACCOUNTING EXPOSURE 519 should be hard to predict in general, depending, for instance, on whether the firm is an exporter ...
520 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES assets will not be affected. Thus, according to this method, we should adju ...
13.4. ACCOUNTING EXPOSURE 521 corresponding from non-monetary sources (like depreciation of assets). These are translated at the ...
522 CHAPTER 13. MEASURING EXPOSURE TO EXCHANGE RATES Under this method, a 15% devaluation means a 15% decrease in the net value ...
13.4. ACCOUNTING EXPOSURE 523 Given the wide choice that is offered in many cases, one could wonder which method is best. And ev ...
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