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what approach/method would you use to estimate the exchange rate risk for table 2 and what approach/method would be used to estimate the exchange rate
what approach/method would you use to estimate the exchange rate risk for table 2 and what approach/method would be used to estimate the exchange rate risk for table 3?
Table 2: Range of Net Cash Inflows and Outflows for Quarter 4, 2004 Currency Total Inflow (Local Currency) Expected Exchange Rate Net Inflow/Outflow (US $) British Pounds () 10,000,000 1.40 1.6 14,000,000 16,000,000 Canadian Dollars (C$) 10,000,000 0.79 0.81 7,900,000 8,100,000 Swedish Krona (SK) -100,000,000 0.14 0.16 -14,000,000 -16,000,000 Mexican Peso (MP) 80,000,000 0.06 0.11 4,800,000 8,800,000 Table 3: Cash Flows for Past 5 Years from Affiliates in 4 Countries Currency Net Inflow/Outflow (Local Currency) Year 1 Net Inflow/Outflow (Local Currency) Year 2 Net Inflow/Outflow (Local Currency) Year 3 Net Net Inflow/Outflow Inflow/Outflow (Local (Local Currency) Currency) Year 4 Year 5 10,000,000 20,000,000 60,000,000 50,000,000 British Pounds () 10,000,000 10,000,000 13,000,000 Canadian Dollars (C$) 135,000,000 135,000,000 160,000,000 Swedish Krona (SK) -100,000,000 -120,000,000 -111,000,000 140,000,000 110,000,000 80,000,000 Mexican Peso (MP) 76,000,000 86,000,000 96,000,000 55,000,000 Table 2: Range of Net Cash Inflows and Outflows for Quarter 4, 2004 Currency Total Inflow (Local Currency) Expected Exchange Rate Net Inflow/Outflow (US $) British Pounds () 10,000,000 1.40 1.6 14,000,000 16,000,000 Canadian Dollars (C$) 10,000,000 0.79 0.81 7,900,000 8,100,000 Swedish Krona (SK) -100,000,000 0.14 0.16 -14,000,000 -16,000,000 Mexican Peso (MP) 80,000,000 0.06 0.11 4,800,000 8,800,000 Table 3: Cash Flows for Past 5 Years from Affiliates in 4 Countries Currency Net Inflow/Outflow (Local Currency) Year 1 Net Inflow/Outflow (Local Currency) Year 2 Net Inflow/Outflow (Local Currency) Year 3 Net Net Inflow/Outflow Inflow/Outflow (Local (Local Currency) Currency) Year 4 Year 5 10,000,000 20,000,000 60,000,000 50,000,000 British Pounds () 10,000,000 10,000,000 13,000,000 Canadian Dollars (C$) 135,000,000 135,000,000 160,000,000 Swedish Krona (SK) -100,000,000 -120,000,000 -111,000,000 140,000,000 110,000,000 80,000,000 Mexican Peso (MP) 76,000,000 86,000,000 96,000,000 55,000,000
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