IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

A Financial Model of Foreign Exchange Exposure

Listed author(s):
  • Christine R Hekman

    (Duke University)

Registered author(s):

    The paper describes a model of foreign exchange exposure. This is defined as the sensitivity of a specific investment's value in reference currency to changes in exchange rate forecasts. This sensitivity may result because some share of the investment cash flows are denominated in foreign currency. Alternatively, a share of cash flows denominated in reference currency which are affected by future exchange rates can also generate sensitivity.The model integrates a general corporate valuation framework with a theory of expectations and a general model of corporate macro-economic relationships. Its contribution is in generalizing previous models of these relationships. It also provides a link between empirical work, theoretical descriptions of the exchange rate/relative price relationship, and corporate valuation theory.The model implies a fairly rich description of the corporate and economic characteristics which determine exposure. These descriptors may be used to explain differences in the responses to exchange rate changes of different companies, product lines, or industries.© 1985 JIBS. Journal of International Business Studies (1985) 16, 83–99

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.

    File URL:
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Palgrave Macmillan & Academy of International Business in its journal Journal of International Business Studies.

    Volume (Year): 16 (1985)
    Issue (Month): 2 (June)
    Pages: 83-99

    in new window

    Handle: RePEc:pal:jintbs:v:16:y:1985:i:2:p:83-99
    Contact details of provider: Web page:

    Web page:

    Order Information: Web:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:pal:jintbs:v:16:y:1985:i:2:p:83-99. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

    or (Rebekah McClure)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.