Your SlideShare is downloading. ×
Summary risk_Top 10 List on Global Finance Review
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Summary risk_Top 10 List on Global Finance Review

184
views

Published on

Summary of 5848 learning Module 4 on Hedging against Risk

Summary of 5848 learning Module 4 on Hedging against Risk

Published in: Business

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
184
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. What Have We Learned so Far? The Top Ten Click here for a video commentary on your Top Ten Halftime Review!. 1. We’ve learned there are consequences of doing nothing about it 2. We’ve learned that there are different ways to deal with it 3. We’ve learned that each way of dealing with it has it’s own strengths and weaknesses 4. We’ve learned how to eliminate it with certainty using a Forward Contract 5. We’ve learned how to limit downside risk and keep upside opportunity by buying a single option…. if we’re willing to pay for the ‘insurance’ 6. We’ve learned how to use offsetting options to provide certainty as to our outcome, with no or minimal net cost….but we’ve generally focused on forsaking the upside 7. We’ve learned the concept of ‘liberalizing’ or manipulating our Option inputs to induce various other outcomes, including managing premium costs as a trade-off against accepting some downside risk, or retaining upside risk 8. We’ve learned that, as companies get more complicated, they need to find ways to streamline their process for handling foreign currency transaction risk 9. We’ve learned that we just have to live with the fact that, however good or careful we are in setting up our model for dealing with transaction risk, every once in a while doing nothing would have led to a better outcome. 10. And….we’ve learned that there are multiple correct solutions to the transaction risk problem facing companies that engage in multinational business 5848 Global Finance – R. Gross