Exposures

 Exposures Article

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HOW ARE EXCHANGE CHARGE EXPOSURES MANAGED BY MNCs?

BY

0808982

A project survey submitted in part requirement for the

M. A in Business Economics

University of Glasgow

Institution of Business

February almost eight, 2012

TERM COUNT: on the lookout for, 903

DESK OF MATERIAL

ABSTRACT............................................................................................................................ five

1 . INTRO...................................................................................................... 6

installment payments on your LITERATURE REVIEW.......................................................................................... 9

1 . The Framework For FOREIGN EXCHANGE Determination............................................................. 9

2 . 1 . 1 Getting Power Parity (PPP).................................................................... 9

2 . 1 ) 2 Rate of interest Parity (1RP).......................................................................... 11

2 . 1 . several International Fisher Effect (IFE)................................................................ 11

2 . Types of Foreign Exchange (FX) Exposures.................................................... doze

2 . 2 . 1 Translation Exposure……………………………………………………12

2 . 2 . two Transaction Exposure……………………………………. …………….. 13

2 . 2 . 3 Financial Exposure……………………………………………... ………13

3. Dimension of FOREIGN EXCHANGE Exposure........................................................................... 13

4. Administration of FOREIGN EXCHANGE Exposure............................................................................. 15

2 . four. 1 Inner Hedging........................................................................................... of sixteen

A) Reorganization, rearrangement, reshuffling............................................................................................. 16

B) Netting....................................................................................................... of sixteen

C) "balance sheet" Hedging.............................................................................. 18

2 . 4. 2 Exterior Hedging.......................................................................................... 17

A) Forex Options....................................................................................... seventeen

B) Foreign currency Swaps........................................................................................ 18

C) Forwards Contracts..................................................................................... 18

D) Long term Contracts........................................................................................ 19

3. RESEARCH METHODOLOGY.................................................................................... twenty

4. FOREX EXPOSURES AND CAR DEVELOPING MNCs.......................................... 3

1 . General Motors (GM): Company Profile............................................................... 23

some. 1 . 1 GM FOREIGN EXCHANGE Exposure Hedge........................................................................... 25

5. 2 Ford Motors: Company Profile............................................................................... 26

4. 2 . 1 Kia Motors FOREIGN EXCHANGE Exposure...