Economic Risk _ACCA考试FM知识点来啦!2021年ACCA考试时间越来越近,小编为大家整理了Economic Risk _ACCA考试FM知识点,希望能够帮助到大家。
【科目】
ACCA-FM
【知识点】
Economic Risk
Economic Risk
This refers to the effect of exchange rate movements on the international competitiveness of a company and refers to the effect on the present value of longer term cash flows.
For example, a UK company might use raw materials, which are priced in US dollars, but export its products mainly within the EU. A depreciation of sterling against the dollar or an appreciation of sterling against other EU currencies will both erode the competitiveness of the company.
Economic exposure can be difficult to avoid but a favored strategy is to diversify internationally, in terms of sales, location of production facilities, raw materials and financing. Such diversification is likely to significantly reduce the impact of economic exposure relative to a purely domestic company, and provide much greater flexibility to react to real exchange rate changes.
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