Pre-transaction risk and Supply curve: Difference between pages

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imported>Doug Williamson
(Expand to deal with multiple export markets.)
 
imported>Doug Williamson
(Expand.)
 
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''Foreign exchange risk management''
''Economics.''


1.
A graphical illustration of the periodic quantity of a specified good or service that the producer would be prepared to produce and sell at a given price.


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 price lists in the currencies of its customers' local markets.
Supply curves are generally upward sloping.


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.
As the price increases, the quantity supplied increases.


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.
As the price decreases, the quantity supplied decreases.
 
 
2.
 
The same as Contingent risk as applied to currency management.
 
 
Also known as pre-transactional risk, pre-transaction exposure or pre-transactional exposure.




== See also ==
== See also ==
* [[Contingent risk]]
* [[Demand curve]]
* [[Currency risk]]
* [[Production possibility curves]]
* [[Economic risk]]
* [[Foreign exchange risk]]
* [[Translation risk]]
* [[Transaction risk]]
 
[[Category:Manage_risks]]

Revision as of 14:16, 5 May 2016

Economics.

A graphical illustration of the periodic quantity of a specified good or service that the producer would be prepared to produce and sell at a given price.


Supply curves are generally upward sloping.

As the price increases, the quantity supplied increases.

As the price decreases, the quantity supplied decreases.


See also

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