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Calculating Economic Exposure
Foreign asset or overseas cash flow value fluctuates with the exchange rate changes. We know…
Posted inInternational Finance
Benefits and Risks of Financial Globalization
One of the major benefits of Financial Globalization is that the risk of a "credit…
Posted inInternational Finance
Economic Exposure – An Example
Consider a big U.S. multinational with operations in numerous countries around the world. The company’s…
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Types of Exposure
Companies are exposed to three types of risk caused by currency volatility − ● Transaction exposure − Exchange rate…
Posted inInternational Finance
Exchange Rate Fluctuations
Exchange rate fluctuations affect not only multinationals and large corporations, but also small and medium-sized…
Posted inInternational Finance
Exchange Rate Forecast: Models
Some important exchange rate forecast models are discussed below. Purchasing Power Parity Model The purchasing…
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Exchange Rate Forecast: Approaches
The two most commonly used methods for forecasting exchange rates are − ● Fundamental Approach − This is a…
Posted inInternational Finance
Exchange Rate Forecasts
Economists and investors always tend to forecast the future exchange rates so that they can…
Posted inInternational Finance
Factors Affecting International Equity Returns
Macroeconomic factors, exchange rates, and industrial structures affect international equity returns. Macroeconomic Factors Solnik (1984)…
Posted inInternational Finance
Global Registered Shares (GRS)
GRS are a share that are traded globally, unlike the ADRs that are receipts of…