Strategic Risk And Exposure Term Paper

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Strategic Risk and Exposure Strategic exposure refers to the risk that makes the foreign exchange rate movements unfavorable and will influence the present value of firm's future cash flows. This is also known as long-term transaction exposures in terms of financial jargon. (Operating / Strategic Exposure) A close watch on the financial statement i.e. The main source of financial information of a firm reveals a picture of the exposure of the company to the strategic risks. The magnitude to which the value of the company is responsive to the changes in the interest, exchange and commodity prices indicates its exposure to the financial risk. The variation in its profit...

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Moreover the exposure to risk also is determined by the process of debt management by the firm revealed from interest cover, debt to equity ratio etc. (An Overview of risk Management-Lecture 2 Treasury Management)
A company strives to manage the strategic risks with a view to enhance the value of a company. The strategic exposure is the necessary condition…

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References

An Overview of risk Management-Lecture 2 Treasury Management. Retrieved from http://accfinweb.account.strath.ac.uk/am/tml2.html Accessed 1 November, 2005

Enterprise Risk Management -- Integrated Framework. September, 2004. Retrieved from http://www.coso.org/Publications/ERM/COSO_ERM_ExecutiveSummary.pdf Accessed 1 November, 2005

Operating / Strategic Exposure. Retrieved from http://www.lse.co.uk/financeglossary.asp?searchTerm=&; iArticleID=1753& definition=operating_/_strategic_exposure Accessed 1 November, 2005


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