We review and clarify the role of foreign exchange (FX) rates in international capital budgeting and currency risk management. We show how the outcome of a net present value (NPV) analysis, from the perspective of the home currency, is affected by a misvalued current spot FX rate, or by a...

This study investigates, in a conceptual way, the intrinsic valuation of sports futures wagers and, given the absence of a viable secondary market, strategies for locking in pre-expiration value by hedging with the existing set of futures wagers, proposition wagers, and game wagers. An...

We review and clarify the role of foreign exchange (FX) rates in international capital budgeting and currency risk management. We show how the outcome of an NPV analysis, from the perspective of the home currency, is affected by a misvalued current spot FX rate, or by a forecast of misvalued...

We review and clarify the role of foreign exchange (FX) rates in international capital budgeting and currency risk management. We show how the outcome of a net present value (NPV) analysis, from the perspective of the home currency, is affected by a misvalued current spot FX rate, or by a...

For two hypothetical firms with different home currencies, this study compares alternative production locations if the firms compete in one firm’s home country. Using simple three-outcome scenarios, the study shows that a firm’s foreign exchange (FX) exposure depends on the currency location...