CHAPTER-9-Management-of-Economic-ExposureWord文档下载推荐.doc

CHAPTER-9-Management-of-Economic-ExposureWord文档下载推荐.doc

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ManagingOperatingExposure

SelectingLow-CostProductionSites

TheStrongYenandToyota’sChoice

FlexibleSourcingPolicy

DiversificationoftheMarket

R&

DEffortsandProductDifferentiation

FinancialHedging

PorschePowersProfitwithCurrencyPlays

CASEAPPLICATION:

ExchangeRiskManagementatMerck

Summary

MINICASE:

EconomicExposureofAlbionComputersPLC

1SupposetheU.S.dollarsubstantiallydepreciatesagainsttheJapaneseyen.Thechangeinexchangerate

a）CanhaveasignificanteconomicconsequencesforU.S.firms.

b）CanhaveasignificanteconomicconsequencesforJapanesefirms.

c）CanhaveasignificanteconomicconsequencesforbothU.S.andJapanesefirms.

d）Noneoftheabove

Answer:

c）

2SupposetheU.S.dollarsubstantiallydepreciatesagainsttheJapaneseyen.Thechangeinexchangerate

a）Willtendtoweakenthecompetitivepositionofimport-competingU.S.carmakers.

b）Willtendtostrengthenthecompetitivepositionofimport-competingU.S.carmakers.

c）WilltendtostrengthenthecompetitivepositionofJapanesecarmakersattheexpenseofU.S.makers.

b）

3WhentheMexicanpesocollapsedin1994,decliningby37percent,

a）U.S.firmsthatexportedtoMexicoandpricedinpesowereadverselyaffected.

b）U.S.firmsthatexportedtoMexicoandpricedindollarswereadverselyaffected.

c）U.S.firmswereunaffectedbythepesocollapse,sinceMexicoissuchasmallmarket.

d）Botha）andb）

d）

Rationale:

a）isobvious,thedollarvalueofrevenuefell.Answerb）islessobvious,butthosefirm’sMexicancustomerswerelessabletoaffordtheimportedgoods.

4Whenexchangerateschange,

a）U.S.firmsthatsellonlytodomesticcustomerswillbeunaffected.

b）U.S.firmsthatsellonlytodomesticcustomerscanbeaffectediftheycompeteagainstimports.

c）U.S.firmsthatsellonlytodomesticcustomerswillbeaffected,butonlyiftheyborrowinforeigncurrencytofinancetheirdomesticoperations.

5Whenexchangerateschange,

a）Thiscanaltertheoperatingcashflowofadomesticfirm.

b）Thiscanalterthecompetitivepositionofadomesticfirm.

c）Thiscanalterthehomecurrencyvaluesofamultinationalfirm’sassetsandliabilities.

d）Alloftheabove

6TworecentstudieshavefoundalinkbetweenexchangeratesandthestockpricesofU.S.firms,

a）Thissuggeststhatexchangeratechangescansystematicallyaffectthevalueofthefirmbyinfluencingitsoperatingcashflows.

b）Thissuggeststhatexchangeratechangescansystematicallyaffectthevalueofthefirmbyinfluencingthedomesticcurrencyvaluesofitsassetsandliabilities.

c）a）andb）

d）Noneoftheabove

7Economicexposurerefersto:

a）thesensitivityofrealizeddomesticcurrencyvaluesofthefirm’scontractualcashflowsdenominatedinforeigncurrenciestounexpectedexchangeratechanges

b）theextenttowhichthevalueofthefirmwouldbeaffectedbyunanticipatedchangesinexchangerate

c）thepotentialthatthefirm’sconsolidatedfinancialstatementcanbeaffectedbychangesinexchangerates

d）expostandexantecurrencyexposures

b）

8Itisconventionaltoclassifyforeigncurrencyexposuresintothefollowingtypes:

a）economicexposure,transactionexposure,andtranslationexposure

b）economicexposure,noneconomicexposure,andpoliticalexposure

c）nationalexposure,internationalexposure,andtradeexposure

d）conversionexposure,andexchangeexposure

a）

9Exposuretocurrencyriskcanbemeasuredbythesensitivitiesof

a）thefuturehomecurrencyvaluesofthefirm’sassetsandliabilities

b）thefirm’soperatingcashflowstorandomchangesinexchangerates

d）noneoftheabove

10Currencyrisk

a）isthesameascurrencyexposure

b）representsrandomchangesinexchangerates

c）measure“whatthefirmhasatrisk”

d）a）andb）

11SupposeaU.S.-basedMNCmaintainsavacationhomeforemployeesintheBritishcountrysideandthelocalpriceofthispropertyisalwaysmovingtogetherwiththepoundpriceoftheU.S.dollar.Asaresult,

a）Wheneverthepounddepreciatesagainstthedollar,thelocalcurrencypriceofthispropertygoesupbythesameproportion.

b）Thefirmisnotexposedtocurrencyriskevenifthepound-dollarexchangeratefluctuatesrandomly.

12Theexposurecoefficientintheregress