tailieunhanh - Lecture Multinational financial management: Lecture 30 - Dr. Umara Noreen

In this chapter, the following content will be discussed: To explain the key findings and important implications with respect to the usage of derivatives in greece, the results of the survey indicate that the use of derivatives in risk management is not wide spread among domestic firms, it is observed that large firms are more likely to use derivatives contrary to the small size ones, | Derivatives Usage in Risk Management by Non-Financial Firms: Evidence from Greece By Spyridon K. Kapitsinas PhD Center of Financial Studies, Department of Economics, University of Athens, Greece Impact of International Financial Reporting Standards The introduction of IFRS and the changes in the accounting methods that the Standards dictate have increased the concern of firms about derivatives usage. of users indicate that IFRS will have no effect on derivative use and risk management strategy. Methods used for the evaluation of derivatives’ risk. The responses reveal that Value at Risk is the most popular method of risk assessment among users since of them adopt it, with stress testing/scenario analysis a close second at . Both of these processes are “state of the art” in the calculation of risk . Foreign Exchange Risk Management of currency derivatives users indicate that they have foreign currency revenues that are less than or equal to 10% of | Derivatives Usage in Risk Management by Non-Financial Firms: Evidence from Greece By Spyridon K. Kapitsinas PhD Center of Financial Studies, Department of Economics, University of Athens, Greece Impact of International Financial Reporting Standards The introduction of IFRS and the changes in the accounting methods that the Standards dictate have increased the concern of firms about derivatives usage. of users indicate that IFRS will have no effect on derivative use and risk management strategy. Methods used for the evaluation of derivatives’ risk. The responses reveal that Value at Risk is the most popular method of risk assessment among users since of them adopt it, with stress testing/scenario analysis a close second at . Both of these processes are “state of the art” in the calculation of risk . Foreign Exchange Risk Management of currency derivatives users indicate that they have foreign currency revenues that are less than or equal to 10% of their total operating revenues. just of currency derivatives users report that 20% of their total revenues are in foreign currency. Preference among Foreign Exchange Derivative Instruments In accordance with the international practice, Greek firms prefer at the forward contracts. That is the most important instrument in handling foreign exchange risk. With swaps chosen as first choice by the of currency derivatives users. Percentage of currency derivatives of various maturities The evidence shows that derivative contracts of shorter maturity are more commonly used than those extending to one or more years. In particular, of currency derivatives users select contracts with maturity of ninety days or less. The tendency of firms worldwide to prefer derivatives with short maturity. Impact of incorporation of market expectations into CRM At firms frequently alter the timing and the size of their hedge based on their managers’ expectations, rate that is .