1. Introduction Under the environment of the Global Financial Crisis (GFC)‚ the financial markets had a severe impingement‚ especially the influences to the American financial market. Meanwhile‚ as one of the largest American ‘trading partners’‚ the third largest ‘export market’‚ China offers USA a majority of imports and keeps close trade relation with USA (Morrison‚ 2011‚ pp2-6). It can be seen that the changes of U.S. dollar might affect the Chinese economy. In order to keep sustainable development
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The International Financial Environment Managing the MNC 1. Managers are expected to make decisions that will maximize the stock price * A U.S. view‚ not shared universally. 2. Focus of this text: MNCs whose parents fully own foreign subsidiaries (parent is sole owner of subsidiary.) 3. Finance decisions‚ as always‚ are influenced by other business discipline functions: * Marketing * Management * Accounting and information systems Agency Problems
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In the financial market‚ almost all of companies need to face the currency risk. In order to manage the currency risk‚ companies will use different hedging techniques‚ such as financial and operational hedging techniques. For example‚ money market‚ futures contracts‚ options and forwards contracts are commonly used by firms‚ as well as operational hedging techniques. All of 4 types of financial hedging techniques are short-term hedge. Money market is a part of financial markets for assets involved
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Environmental scan template Table of Contents 1. Introduction 3 2. Filters 3 2.1 Filter example: Type of market 3 2.2 Filter example: Country population 3 3. Template 3 4. Combination of strategy and foreign market conditions 7 5. Further opportunities for action 8 6. Sources 9 Table of Figures Figure 1: Combination of PEST analysis and strategy……………………7 Introduction Scanning the external environment is critically important to ensure the success of firms
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(1958-73) is based on the reserve currency hold by the central bank which fixes its currency exchange rate against the reserve currency by trading domestic for foreign asset when necessary. In this case the central bank fixed the dollar exchange rate of its currency by trading domestic currency for dollar assets. In the foreign exchange market‚ the central bank fixed the currency ’s dollar price‚ and so the exchange rate was automatically fixed through arbitrage. The Floating Exchange Rate
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finance assignment. Exchange Rate is the price of one country’s currency in terms of another country’s currency; the rate at which two currencies are traded for another. It measures the number of units of one currency which exchange‚ in the foreign exchange market for one unit of another. Exchange rates are important because‚ they establish the relationships between the different currencies or monetary units of the world. Exchange rates have been instrumental in developing international trade. These
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University of Business and Economics Agenda Graduate Course I. Introduction Organizational Matters FX Markets and Quotations II. Foreign Exchange Exposure III. Hedging Instruments and Currency Options IV. Practical issues in Corporate Hedging and State of the Art Research Dr. Jakob Müllner Vienna University of Business and Economics 4 Introduction I. Organizational Matters II. FX Markets and Quotations Dr. Jakob Müllner Vienna University of Business and Economics 5 Learning Outcomes Undergraduate
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Balance of Payments Foreign Exchange Market -Foreign Exchange Market -How do we determine FX? Any risk? -International Parity Conditions -FX Derivatives Foreign Exchange Market 1. Hedging Currency Risk at AIFS Foreign Exchange Risk Management -Transaction Exposure -Operating Exposure -Accounting Exposure Foreign Exchange Exposure and Management 2. Foreign Exchange Hedging Strategies at General Motors: Competitive Exposures Financing Global Firms Foreign Investment Decisions
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the price of a unit of foreign currency in terms of the domestic currency. In the Philippines‚ for instance‚ the exchange rate is conventionally expressed as the value of one US dollar in peso equivalent. For example‚ US$1 = P44.00. In every exchange rate quotation‚ therefore‚ there are always two currencies involved. 2. Why is the exchange rate important? The exchange rate is important for several reasons: It serves as the basic link between the local and the overseas market for various goods‚ services
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reflect the ability of international liquidity to finance the balance of payments deficit on account of foreign currency cash and other assets held by the monetary authority (central bank) of a country. More broadly‚ international liquidity is the ability of the country (or group of countries) to ensure timely payment of its foreign obligations by means acceptable to the lender. In terms of foreign exchange liquidity in the global economy means all sources of international finance and international
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