--%>
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 : Deposit-loan rate spread in Eurodollar

    Explain, how does deposit-loan rate spread within the Eurodollar market as compared to the deposit-loan rate spread in domestic U.S. banking system and why?

    		•
  • Q : Advantages for giving Cash Discount

    What are various advantages for giving Cash Discount?

    		•
  • Q : What are Personal accounts What are

    What are Personal accounts. Describe their types?

    		•
  • Q : Performing the capital budgeting

    Explain difference between performing the capital budgeting analysis from the parent firm’s perspective as opposed to the project perspective.

    		•
  • Q : Define Goods Define Goods briefly as an

    Define Goods briefly as an inventory?

    		•
  • Q : Applications of Matlab in Embedded

    Do you face difficulty with embedded system problems using matlab? Do you require help in embedded system assignment and project? We have team of tutors who are highly qualified and practiced in embedded system using matlab. They have vast industrial knowledge of matlab. W

    		•
  • Q : Avoidable Interest The book says

    The book says "avoidable interest is the amount of interest cost during the period that a company could theoretically avoid if it had not made expenditures for the asset." This makes it sound like avoidable interest is the total amount of interest paid for an asset. I know it's not but I was wonder

    		•
  • Q : Essential condition for

    Specify the essential condition for the fixed-for-floating interest rate swap to be possible?

    		•
  • Q : Accountancy Accountancy is the process

    Accountancy is the process of communicating financial information about a business entity to users such as shareholder and manager. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in s

    		•
  • Q : Political events affecting the local

    Discuss about the different ways in which the political events in the host country affects the local operations of MNC.

    		•