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    Truong Minh Hoang
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    MNCs constantly face the decision of whether to hedge the future payables and receivables in foreign currencies. The ideal currency for deposits will exhibit a high interest rate and (2) strengthen in value over the invest ment period. An MNC's parent asseses whether to invest funds in a foreign project, the firm takes into account that th project may periodically require the exchange of currencies.

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    Reasons for FX Forecasting

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    MNCs constantly face the decision of whether to hedge the future payables and receivables in foreign currencies. The ideal currency for deposits will exhibit a high interest rate and (2) strengthen in value over the invest ment period. An MNC's parent asseses whether to invest funds in a foreign project, the firm takes into account that th project may periodically require the exchange of currencies.

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    7 views1 page

    Reasons For FX Forecasting

    Uploaded by

    Truong Minh Hoang
    MNCs constantly face the decision of whether to hedge the future payables and receivables in foreign currencies. The ideal currency for deposits will exhibit a high interest rate and (2) strengthen in value over the invest ment period. An MNC's parent asseses whether to invest funds in a foreign project, the firm takes into account that th project may periodically require the exchange of currencies.

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    CHAPTER 9: FORCASTING EXCHANGE RATES

    1. Reasons for FX forecasting: page 273, 274 a. Hedging decision. MNCs constantly face the decision of whether to hedge the future payables and receivables in foreign currencies. Whether a firm hedges may be determined by its forecasts or foreign currency values. b. Short-term investment decision: To deal with excess cash available for a short time period. The ideal currency for deposits will (1) exhibit a high interest rate and (2) strengthen in value over the invest ment period. c. Capital budgeting decision: An MNC's parent asseses whether to invest funds in a foreign project, the firm takes into account that th project may periodically require the exchange of currencies. The K budgeting analysis can be analysis can be completed only when all estimated cash flows are measured in the parent's local currency. d. Earnings assessment: e. Longterm financing decision: Model:

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