What are the limitations of relying on the purchasing power parity framework to gauge firms economic/operating exposure

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What are the limitations of relying on the purchasing power parity framework to gauge firms’ economic/operating exposure to foreign exchange risk?

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International Corporate Finance Value Creation With Currency Derivatives In Global Capital Markets

ISBN: 9781119550464

2nd Edition

Authors: Laurent L. Jacque

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Question Posted: Mar 09, 2024 01:01 AM

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What are the limitations of relying on the purchasing power parity framework to gauge firms economic/operating exposure

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While purchasing power parity PPP is a useful concept for understanding exchange rates and relative price levels between countries it has limitations ...View the full answer

International Corporate Finance Value Creation With Currency Derivatives In Global Capital Markets

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