Explain the benefits and drawbacks of financial hedging, Financial Management

Assignment Help:

What are the benefits and drawbacks of financial hedging of the firm’s operating exposure vis-a-vis operational hedges (like relocating manufacturing site)?

Answer:  Financial hedging can be implemented rapidly along with comparatively low costs, but it is hard to hedge against long-term, real exposure along with financial contracts. Alternatively, operational hedges are costly, time-consuming, and not simply reversible.


Related Discussions:- Explain the benefits and drawbacks of financial hedging

Volume of issues of central and state government securities, Volume of Issu...

Volume of Issues of Central and State Government Securities The growth of government securities market in India and the investor response to the government bond issues can be k

Estimate most recent year-end financial statements, Select a publicly trade...

Select a publicly traded company (preferably manufacturing oriented; do not use a financial services company such as a bank or a bank holding company) and obtain a copy of their mo

Interest rate risk in financial management, Q. Interest Rate Risk in financ...

Q. Interest Rate Risk in financial management Interest rate risk is the variation in the single period rates of return caused by the fluctLlaoons in the market interest rate. M

Modified duration versus effective duration, Modified duration is use...

Modified duration is used to determine the percentage change in the bond's prices for a 100 basis point (1%) change in the yield. The underlying assumption is tha

How to select the pattern of the investment, Q. How to Select the pattern o...

Q. How to Select the pattern of the investment? When the funds have been procured than a decision about the investment pattern is to be taken. The selection of the investment p

Estimate the companys wacc, Assemble all other inputs/assumptions based on ...

Assemble all other inputs/assumptions based on the past data. Use your best judgment to have the most reasonable estimates. Tasks 1. Prepare an Excel spreadsheet containi

Savings, This is the part of after-tax personal income that is not spent.

This is the part of after-tax personal income that is not spent.

What can financial institution do for deficit economic unit, What can a fin...

What can a financial institution Frequently do for a deficit economic unit (DEU) that it would have difficulty doing for itself if the DEU were to deal directly along with an SEU?

Bootstrapping, In bootstrapping method, on-the-run treasury issues ar...

In bootstrapping method, on-the-run treasury issues are used as they are fairly priced, and there is no credit risk or liquidity risk involved. In practice observed yie

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