Review the annual reports of three MNCs found at www.reportgallery.com.
1. Is it obvious from their annual reports whether these companies are hedging their economic, transaction, or translation exposure?
2. Which currencies have these companies borrowed in besides the U.S. dollar? Do these foreign currency borrowings offset any obvious economic exposures they have in those currencies (e.g., because they have a subsidiary located in that country)?
BIBLIOGRAPHY
Adler, Michael, and Bernard Dumas. “Exposure to Currency Risk: Definition and Measurement.” Financial Management, Summer 1984, pp. 41–50.
Ankrom, Robert K. “Top Level Approach to the Foreign Exchange Problem.” Harvard Business Review, July/August1974, pp. 79–90.
Cornell, Bradford, and Alan C. Shapiro. “Managing Foreign Exchange Risks.” Midland Corporate Finance Journal, Fall 1983, pp. 16–31.
Eaker, Mark R. “The Numeraire Problem and Foreign Exchange Risk.” Journal of Finance, May 1981, pp. 419–426.
Garner, C. Kent, and Alan C. Shapiro. “A Practical Method of Assessing Foreign Exchange Risk.” Midland Corporate Finance Journal, Fall 1984, pp. 6–17.
Giddy, Ian H. “Exchange Risk: Whose View?” Financial Management, Summer 1977, pp. 23–33.
Lessard, Donald R., and John B. Lightstone. “Volatile Exchange Rates Can Put Operations at Risk.” Harvard Business Review, July/August 1986, pp. 107–114.
Shapiro, Alan C. “Exchange Rate Changes, Inflation, and the Value of the Multinational Corporation.” Journal of Finance,May 1975, pp. 485–502.
———, and Thomas S. Robertson. “Managing ForeignExchange Risks: The Role of Marketing Strategy.” Working Paper, The Wharton School, University of Pennsylvania,1976.
(Shapiro 403)
Shapiro. Multinational Financial Management, 9th Edition. John Wiley & Sons. <vbk:9780470894385#outline(11)>.