Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
METHODS OF DEALING WITH FOREIGN EXCHANGE RISKS
A firm can deal with foreign exchange risks in the following ways:
1) Taking Risk: The firm may decide to bear the risk if the foreign currency depreciates or appreciates and pocket the gain resulting therefrom. Bigger firms having both imports and exports can match the losses and gains on exports with gains or losses on imports.
Matching will ultimately minimise the losses and gain if any. Matching is easier in a large diversified firm than in a firm dealing in one product only. Large trading houses and export houses as also STC and MMTC can do it easily. An important point to be mentioned here is that losses and gains due to exchange fluctuations are taken into account for tax purposes. Thus assuming that the rate of tax is 50 per cent, the impact of losses due to exchange fluctuations, if any is reduced to 50 per cent only.
2) Using a Hedging Clause: The exporter can use a hedging clause in the contract with the customer/supplier providing for a revision of price in the event of a significant change. This will tend to protect both parties as movement in exchange rates may both be the upwards and downwards. While you protect yourself against a loss, you lose the possibility of making a profit. However, the customer/supplier may not agree for such a clause in short-term agreement. But it is more easily possible in long-term contracts.
3) Entering into Forward Contract: Forward contracts are deals between two parties who enters into the contract for buying or selling of the foreign currency at a future date. The firm can enter into a forward contract with his banker. If it is an importer, it can purchase foreign currency to be delivered in future (forward purchase). If it is an exporter, it can sell foreign currency to be delivered in future (forward sale). This will ensure that the firm receives or pays a certain amount of rupees respective of changes in the value of foreign currency involved.
INSURANCE CLAIMS : When there is a loss, the insured is to proceed to claim the loss recovery from the insurer. The cardinal principle about insurance claims is that the insured
evaluate the extent to which each element of i phone''s marketing mix contributes to its success
is control and strengh is same in order to do the marketing plan ?.
Differentiate yourself with disgracefully bold guarantees that you're competition don't have the guts for. Most people are authentically honest, and if your service is what you say
wholesaling strategy
Government publishes administrative reports of various departments reports of commissions and committees India A Reference Annual etc, The sources of locating government publica
Q. How consumer behaviour is effected by attitude Change? Affect . Consumers as well hold certain feelings toward brands or other objects. Occasionally these feelings are base
please iam search for simple electronic ,fast result, instrument for test the ash in the flour could you guide me to the name of this instrument or model no. which should be hand h
consumer behaviour helped groupon
IMPORTANCE OF EXPORTS : Look at Table for clear understanding of India's Exports Imports and Trade Balance. The table shows that India's Trade Balance was -2 Crores during 1950-5
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd