--%>
Assignment Help - homework help

Uncertainty in dollar/franc exchange rate

Suppose that your company has an equity position within the French firm. Explain some of the condition under which the dollar/franc exchange rate uncertainty does not have the exchange exposure for your company.

E

Expert

Verified

Small changes in the exchange rates do not essentially constitute the currency exposure. If French franc value of the equity moves in the opposite direction as much as the dollar value of the franc changes, then dollar value of the equity position will be insensitive to the exchange rate movements. Consequently, your company will not be exposed to the currency risk.

   Related Questions in Financial Accounting

  • Q : Random walk model for exchange rate

    Explain about random walk model for exchange rate forecasting. Will it be reliable with the technical analysis?

    		•
  • Q : Calculate the bad debt expense for the

    The Webster Company uses the aging method to estimate the allowance for doubtful accounts. The following schedule of accounts receivable was prepared as at December 31, 20x6: Age Balance %

    		•
  • Q : Goal programming model Write an article

    Write an article on Goal programming model to address the selection of the best group of quality control instruments in designing a quality control system for service organizations.

    		•
  • Q : Official reserve assets Describe the

    Describe the official reserve assets and some of its important components.

    		•
  • Q : French Association of Private Companies

    In the year 1995, working group of the French chief executive officers was formed by the Confederation of French Industry (CNPF) and the French Association of Private Companies (AFEP) for studying the structure of the French corporate governance. Group has reported th

    		•
  • Q : Salary outstanding account What type of

    What type of Account is Salary outstanding? What do you think, it is real or personnel or the nominal account?

    		•
  • Q : Variants of basic interest rate and

    Discuss briefly some of the variants of the basic interest rate and currency swaps.

    		•
  • Q : Firms attaining the U.S. firms

    Presently, several foreign firms from both the developed and developing countries attained high-tech U.S. firms. What would have motivated these firms in order to attain the U.S. firms?

    		•
  • Q : Type of bond instrument You are an

    You are an investment banker who is advising a Euro bank about the new international bond offer it is considering.  Proceeds are to be used to fund Eurodollar loans to the bank clients.  Specify the type of bond instrument you would recommend that bank shoul

    		•
  • Q : Prepare the balance sheet At the end of

    At the end of March, 2006 the balances in the various accounts of TTTTT & Company are as follows: Rs. in million Accounts Balance Equity capital 120 Preference capital 30 Fixed assets (net) 217 Reserves and surplus 200 Cash

    		•