Bec doms ppt on managing risk in international business
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The document discusses managing risk in international business through a new framework that overcomes shortcomings of traditional techniques. The framework uses market data to generate parameters compatible with modern portfolio theory. It establishes accounting disciplines to define income, expenditures, and link them to balance sheets. This allows estimating new decision making parameters like macroeconomic profits and a country's financial risk premium. The framework is then assessed through country forecasts and performance measurements of international portfolios over various time periods.
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Bec doms ppt on managing risk in international business
- 1. MANAGING RISK IN INTERNATIONAL BUSINESS
- 11. A Big Question DOES IT WORK?
- 13. CLARK vs. EUROMONEY The Result 1993
- 15. Performance Measurement INTERNATIONAL PORTFOLIOS
- 16. Money Market Portfolios 1982-1991
- 17. Long Term Government Bond Portfolios 1982-1991
- 19. Excess Return to Risk for Selected Portfolios 1982-1991
Hinweis der Redaktion
- 1) International business risk is a wide ranging concept. Examples: - for the exporter it can mean currency risk on export transactions, or the imposition of tariffs, and quotas; - for the direct investment, merger or an acquisition it can mean losses or reduced profits due to macroeconomic mismanagement, exchange controls, expropriation or other types of government intervention; - for the lender it can mean payment delays and default; - for the portfolio investor it can mean market volatility, currency fluctuations, transaction costs such as brokerage fees, stamp duties, taxation and other regulations. The possibilities are limitless. 2) The international economic and financial consultant should be aware of what the risks are and how they can be assessed and managed. Examples: - in a foreign acquisition, the cost of possible losses due to government intervention or the volatility of cash flows caused by currency fluctuations should be factored into the evaluation process; - legal counseling is most effective when it anticipates potential conflicts and and advises on how they can be avoided or their effects minimized.
- 1. To answer this question I constructed mean variance optimized ex ante portfolios using the World Index over the period 1982-1991 for three types of assets: - money market instruments - long term government bonds - equity indexes. The universe included 60 countries. 2. I compared the results of the optimized portfolios with the performance of other diversification strategies (equal weights, GDP weights, Japan-Germany-Switzerland)