Discuss some examples of economic and transaction exposures for
international firms. How do firms mitigate these risks?
Transaction exposure occurs when companies buy or sell in
different currencies. It occurs when there is international trade
.There is actual cash outflow or inflow. Hence there is actual
profit or loss.
Example. If a US based company buys a product from India and the
payment is to be made in Indian Rupee. Then the entire risk of
currency exchange lies with the US company if the product is sold
in terms of Rupee
Hedging towards forwards contracts help to mitigate transaction
exposure.
Economic exposure is the long term impact of cash flows due to
economic issues in a country. It is also known as Operating
exposure . Economic exposure is difficult to predict and hedging
against it is difficult.
Example:Due to economic factors if the US GDP continuously
increases then the US currency appreciates. This puts foreign
companies in US at higher exchange rate risk.
It is mitigated through different hedging options and by increasing
efficiency of operation.
Discuss some examples of economic and transaction exposures for international firms. How do firms mitigate these...
International Opportunities" Please respond to the following: · Determine why, given the advantages of international diversification, some firms choose not to expand internationally. Provide specific examples to support your response. · As firms attempt to internationalize, they may be tempted to locate their facilities where business regulation laws are lax. Discuss the advantages and potential risks of such an approach, using specific examples to support your response.
Discuss how a FDI can be a financial risk and how to mitigate the risks.
Briefly discuss two risks impacting on global economic developments.Explain how these risks can affect the performance of a firm that is engaged in international trade. What can a firm do to protect itself from these risks?
how do trade barriers affect international marketing? if you can also add some examples that would be greatly appreciated! thank you.
Provide at least two examples on ways that companies can mitigate translation and economic exposure (one example for each)
Foundations of Financial Management: Define and discuss what an exchange rate is and how exchange rates impact international business where firms do business in several currencies worldwide
What methods can management use to mitigate risk in the procurement planning process? How do these methods differ from methods used to mitigate other types of risks?
Differentiate between transaction and translation risks. Explain how these risks affect firms and investors.
* Clearly define international business and present some examples of how its challenges differ from domestic trade. * Compare and contrast various global marketplaces in the world economy. PLEASE DO NOT COPY FROM ANOTHER ANSWER
Discuss best practices use to mitigate some of the perceive problems with cryptology in banking system with citations