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| Author: | Ahtiala, P. Orgler, Y. E. |
| Title: | The value of invoice currency choice in a volatile rate environment |
| Journal: | Multinational Finance Journal
1999 : MAR, VOL. 3:1, p. 1-17 |
| Index terms: | Payment systems International trade Foreign exchange policy Exchange rates Currency options |
| Language: | eng |
| Abstract: | The paper explores the conditions whereby an exporter can gain a competitive advantege by offering a buyer a contract with a choice of invoice currencies rather than a single currency, and determines the value of such a choice. The model incorporates accountants-payable management with exchangerisk management, taking into account the forward exchange rate and the seller's assumptions about the buyer's initial foreign exchange position, its expectations about the future spot rate, and its risk premium. |
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