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| Teaching Since: | Jul 2017 |
| Last Sign in: | 398 Weeks Ago, 4 Days Ago |
| Questions Answered: | 5023 |
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Transaction exposure is the FX exposure that you face on your operating working capital (accounts receivable, accounts payable etc.). Operating exposure is the FX exposure that you face on your long term assets. Which one of these exposures needs to be managed more actively (frequently)? Which tools can you use to manage transaction exposure? In your opinion, managing which of these two exposures is more risky? Why?
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We talked about the PPP and IFE parities in the previous lectures. If these parities would perfectly hold in the market (in other words,your real purchasing power would stay constant), would there be a need to manage FX exposure? Why?
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