Economic Exposure

Richard Friberg
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Richard Friberg: Stockholm School of Economics

Chapter 6 in Exchange Rates and the Firm, 1999, pp 39-45 from Palgrave Macmillan

Abstract: Abstract Economic exposure is defined as the sensitivity in the value of the firm to exchange rate surprises. For this purpose the firm’s value is measured as the present discounted value of expected future cash flows. Since economic exposure is concerned with cash flows and the value of the firm, the reasons for hedging that we mentioned in Chapter 4 are potentially important.

Keywords: Exchange Rate; Cash Flow; Real Exchange Rate; Foreign Currency; Foreign Subsidiary (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-333-98237-2_6

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DOI: 10.1057/9780333982372_6

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