Costs and benefits of hedging practices for small business in Taiwan

Lin, Louis. (1997). Costs and benefits of hedging practices for small business in Taiwan Master's Thesis, School of Business, The University of Queensland.

       
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Author Lin, Louis.
Thesis Title Costs and benefits of hedging practices for small business in Taiwan
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 1997
Thesis type Master's Thesis
Total pages 122
Language eng
Subjects 1503 Business and Management
Formatted abstract As the foreign exchange market in Taiwan is in the process of liberalization, businesses start to experience more fluctuations in the foreign exchanges. In order to investigate the potential of costs and benefits of foreign exchange risk management for small Taiwan firms. This report examine the transaction costs of different types of hedging contracts, hedge ratios, and different methods of future spot rate predictions over the period of four and half years from 01/01/1993. These topics are then coupled together to form different types of hedging strategies for comparison in terms of costs and benefits. Exporters could gain from hedging by reducing the standard deviation of their future cash flows. Importers could gain from hedging by both having reduction of standard deviation in future payment obligations and from increases in mean return yield. It is recommended that small firm should hedge their foreign exchange exposures to gain the benefits of hedging.

 
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Created: Wed, 29 Sep 2010, 17:18:11 EST by Muhammad Noman Ali on behalf of Social Sciences and Humanities Library Service