Exchange rate uncertainty affect firm exchange risk exposure, Financial Management

Assignment Help:

The exchange rate uncertainty may not essentially mean that firms face exchange risk exposure. Describe why this may be the case.

Answer:  A firm can comprise a natural hedging position due to, for instance, flexible sourcing capabilities, diversified markets, etc. Additionally, to the extent that the PPP holds, nominal exchange rate alters do not influence firms’ competitive positions. Within these circumstances, firms do not need to worry about exchange risk exposure.


Related Discussions:- Exchange rate uncertainty affect firm exchange risk exposure

Leverage, Evaluate d importance of leverage in a financial management of a ...

Evaluate d importance of leverage in a financial management of a small sacle business

Explain about discount rate, Q. Explain about Discount Rate? Discount R...

Q. Explain about Discount Rate? Discount Rate - Rate at which INTEREST is deducted in advance of the issuance, selling, purchasing or lending of a financial instrument. Also, t

Ansawar, explain the concept of working capital.what are the factors which ...

explain the concept of working capital.what are the factors which influence the working capital?

Are there any ways to analyze and value seasonal businesses, Are there any ...

Are there any ways to analyze and value seasonal businesses? Seasonal businesses can be valued by discounting flows using annual data, but this needs some adjustments. The righ

Offshore pension funds, (b) What are the possible advantages of an offshore...

(b) What are the possible advantages of an offshore pension fund?

Advantages of private mutual funds, Advantages of Private Mutual Funds ...

Advantages of Private Mutual Funds It is felt that the entry of private Mutual Funds would encourage competitiveness in the financial sector and promote the existing investment

Explain the capital market process, Question 1 State the key functions of ...

Question 1 State the key functions of the financial market. Question 2 Define "Bill of exchange". What are its features? Give different types of cheques. Question 3

Basic objectives of cash management, Q. Basic objectives of cash management...

Q. Basic objectives of cash management? The basic objectives of cash management are two-fold: 1) To meet the cash disbursement needs (payment schedule); and 2) To minimize f

Capital asset pricing model (capm), Capital Asset Pricing Model (CAPM) ...

Capital Asset Pricing Model (CAPM)   Capital Asset Pricing Model (CAPM) is a model which utilizes the measure of systematic risk, 'B' to price assets. The expected rate of r

The oasis report, The Oasis Report Amidst all these problems, the Minis...

The Oasis Report Amidst all these problems, the Ministry of Social Justice and Empowerment constituted a committee with a view to improve old-age social security in the country

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd