Bankruptcy and Pre-transaction risk: Difference between pages
imported>Doug Williamson (Add links.) |
imported>Doug Williamson (Expand to align with study material. DTM U2. 2.2 p65. FX risk identification and assessment 2016.) |
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'' | ''Foreign exchange risk management'' | ||
1. | |||
Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements. | |||
For example, an exporter may need to publish a price list in the currency of its customers' local market. | |||
Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs. | |||
Some practitioners do not identify pre-transaction risk as a separate class of risk, rather considering it to be a shorter-term type of economic exposure. | |||
2. | |||
The same as Contingent risk as applied to currency management. | |||
== See also == | == See also == | ||
* [[ | * [[Contingent risk]] | ||
* [[Currency risk]] | |||
* [[Economic exposure]] | |||
* [[ | * [[Transaction exposure]] | ||
* [[ | |||
* [[ | |||
[[Category: | [[Category:Manage_risks]] | ||
Revision as of 14:03, 8 March 2017
Foreign exchange risk management
1.
Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements.
For example, an exporter may need to publish a price list in the currency of its customers' local market.
Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs.
Some practitioners do not identify pre-transaction risk as a separate class of risk, rather considering it to be a shorter-term type of economic exposure.
2.
The same as Contingent risk as applied to currency management.
