Category Archives: International Trade

Advising bank and its role in LC What is an advising bank in a Letter of Credit (LC)?

Ways to hedge political risk Introduction Political risk refers to the potential negative impact of political factors on businesses operating in foreign countries. These factors can include changes in government policies, regulatory frameworks, social unrest, political instability, and geopolitical events. Political risk can significantly affect a company’s operations, profitability, and long-term viability. In this article,… Read More »

How to Hedge Long Run Exchange Rate Risk? Introduction Exchange rate fluctuations can have significant implications for businesses engaged in international trade and investment. Long run exchange rate risk refers to the potential impact of currency value changes over an extended period. To mitigate this risk, businesses can employ various hedging strategies. In this article,… Read More »

How to Hedge Short Run Exchange Rate Risk? Introduction Exchange rate fluctuations pose risks to businesses engaged in international trade and investment. Short run exchange rate risk refers to the potential impact of currency value changes on transactions that occur within a relatively short time frame. To mitigate this risk, businesses can employ hedging strategies.… Read More »

Financial Complications in International Capital Budgeting Introduction Capital budgeting is a critical process that involves evaluating and selecting investment opportunities to allocate financial resources efficiently. When considering international investments, the complexities and risks increase significantly. In this article, we will explore the financial complications that arise in international capital budgeting, including exchange rate risk, political… Read More »

Procedures for Estimating NPV in Case of International Projects Introduction When evaluating international projects, accurately estimating the Net Present Value (NPV) is crucial for making informed investment decisions. NPV helps assess the profitability and financial viability of projects by considering the time value of money. However, estimating NPV for international projects involves unique considerations due… Read More »