Showing 1 - 10 of 43
Persistent link: https://www.econbiz.de/10000894423
Persistent link: https://www.econbiz.de/10000877312
This paper studies a Cournot duopoly in international trade so that the firms are exposed to exchange rate risk. A hedging opportunity is introduced by a forward market where the foreign currency can be traded on. We investigate two settings: First we assume that hedging and output decisions are...
Persistent link: https://www.econbiz.de/10003796261
Given that a multinational enterprise can react flexibly upon exchange rate movements, international trade flows may be interpreted as an option. An enterprise will opt to export if the profits obtained from exporting under given exchange rate developments are greater than if foreign subsidiary...
Persistent link: https://www.econbiz.de/10003796274
Persistent link: https://www.econbiz.de/10003894218
We study the impact of exchange rate risk upon export production within an emerging economy lacking in currency forward markets. However there exists a financial asset whose price is correlated with the relevant foreign currency. We present conditions under which export production is stimulated...
Persistent link: https://www.econbiz.de/10003867523
Persistent link: https://www.econbiz.de/10003958585
Persistent link: https://www.econbiz.de/10009373022
This paper examines the behavior of a competitive exporting firm that exports to two foreign countries under multiple sources of exchange rate uncertainty. The firm has to cross-hedge its exchange rate risk exposure because there is only a forward market between the domestic currency and one...
Persistent link: https://www.econbiz.de/10009310879
The paper focusses on currency options as financial hedging instrumenta. Since currency forwards imply the well-known Separation result, it follows for arbitragefree hedging markets that Separation must also hold in option markets if the traded options allow for con-structing a synthetical...
Persistent link: https://www.econbiz.de/10009774747