International Finance Coursework - Essay Example

Only on StudentShare

Extract of sample
International Finance Coursework

A firm therefore needs to keep the exchange rate risk at bay. Most firms do so by determining the specific type of exposure to risk, the hedging approach and they also find available instruments to deal with these currency risks. The international transactions the British Venture Capitalist is involved in, exposes them to exchange rate risk. They therefore have to plan in advance and take measures that will protect them against these risks to avoid incurring great losses. There are different types of risks or currency exposures the British Capitalist faces: Transaction risk or simply known as the cash ?ow risk deals with the effect of exchange rate changes position on transactional account exposure linked to receivable, or repatriation of dividends and payables. Any change in the currency exchange rate results in a transaction risk. Translation risk also known as balance sheet exchange rate risk shows the relationship of exchange rate change position to the valuation of a foreign subordinate firm and, in turn, to the consolidation of a foreign subordinate firm to the mother corporation’s balance sheet. ...
Download paper

Summary

Name Subject Date International Finance Coursework 2 Question (a) The Currency Exposure Faced by the British Venture Capitalist The currency exposure is a corporation’s insecurity with respect to its future operating cash flows. It can be simply understood as the possible loss that results from a change in the exchange rates…
Author : deshawn92

Related Essays

International Finance Airbus and Boeing
Boeing Company is the largest aerospace company of US. Its operations are in more than 90 countries. The commercial airplane division is the most prominent of all divisions. The company is headquartered in Illinois and known as premier US aircraft manufacturer. Boeing's revenue in the year 2010 was $64.31 billion and first-half revenue in 2011 was $31.45 billion. The company is subject to foreign currency exchange risk for company's revenue comes through its operations in various locations and company also makes payments to suppliers in foreign currencies. The company needs to manage foreign...
5 pages (1255 words) Essay
International Finance: the case of Lorient Enterprises
This study has tried to analyze the hedging requirement of Lorient Enterprise, based in France that is engaged in transactions with U.S. based company Washington Technical Inc. The company has payables to be made within three months and expects that EUR would depreciate against USD. The currency forward contract compared to currency futures has been identified to be a suitable hedge for the company because its payment date is not aligned with the maturity of the futures contract and the forward contract can be tailor-made according to the company’s requirements. However it has been found...
8 pages (2008 words) Essay
International Finance
There are mainly three types of foreign exchange risks or exposures.This is also known as accounting risk, which a firm faces when it has subsidiary operations in other countries. When the foreign exchange movements adversely affect the translated values of assets and liabilities of the subsidiaries, it becomes an unwanted exposure for the parent company’s consolidated financial statements. This risk can be hedged by using currency futures, currency swaps etc.Transaction Exposure: This exposure is related to the future payments and receipts in foreign currency. Companies many a times limit...
5 pages (1255 words) Assignment
International finance
Engaging in International trade is important for the economies of the two or more countries involved; because there is an exchange of foreign currencies, creation of jobs and enhancement of revenues through taxation of the business profits. For multi-national organizations to survive in this import and export trade, they have to employ financial tools in their assessments, and this includes financial agreements and use of security exchanges. A product of trade in international finance varies depending on locations, legal requirements of operating in such destinations and transaction...
7 pages (1757 words) Research Paper
Enterprise Finance Coursework
The disadvantages are:
...
8 pages (2008 words) Coursework
Finance Assessed Coursework
ct with each other and how the reporters of financial information struggle to strike a balance among these attributes to ensure the usefulness of information for the user. According to the U.S. GAAP Codification of Accounting Standards, financial statements of an enterprise comprise of profit/loss statements, balance sheets, statement of cash flows and an account of stockholders' equity. These statements, combined with additional financial analysis tools and formulae constitute the financial information which in turn serves the needs of the wide range of users of financial information.
8 pages (2008 words) Essay
international finance
Additionally, the company was ranked number two in manufacture of quality skincare products and was awarded Quality System Certification in 2002 by the Saudi Arabia government, making it one of the most renowned cosmetic companies in Middle East. Thus, this paper will delve into a marketing plan of Saudis Cosmetic Company as it tries to enter London, United Kingdom. Southwest Airlines is a service industry in Tunisia that aims at offering its customers with distinctive air transport services. The company started in 1969 in Tunis Tunisia, with an aim of providing its customers with air...
12 pages (3012 words) Research Paper
Got a tricky question? Receive an answer from students like you! Try us!