Exchange Rate Risks To Transnational Contractors And Solutions They’d Take

As the number of World Trade Organization, our economy has already beenintegrated into world economy. Since the second half year of2005, we have put thesupervisory floating exchange rate system into practice based upon supply anddemand of the market. A great many of exporter have to confront the exposure torisks of exchange rate.These firms incurred the economic loss through the flotationof exchange rate. It makes actual sense that both state and enterprises would enhancetheir international competitive capacity.Firstly, the dissertation states the theory of risks of exchange rate, Secondly, itcombined the qualitative analysis with quantitative analysis and collected the data ofquoted companies from authority institution’s websites.Furthermore, the risk ofexchange rate has been approved through SPSS software for these listed companies.Then, the real case study was involved in this dissertation, it explained that flotationof exchange rate had produced the effect on the firm’s earnings. Last but not least,the relative precautions and suggestions have been put forward.The whole dissertation is divided into six sections. Section one states the purpose andsignificance and methods of the research.it introduces the main research trend in theworld today. Section two explains the theory of both the risk of exchange rate and riskmanagement.Section Three proved that the exporter’s earnings had been decreasedby the flotation of exchange rate.the proof of its significance level was given throughregression model. An actual case study was involved in Section four. It has been saidthat the risk of exchange rate had an influence on the individual firm’s value.SectionFive suggests the measures or solutions the firms should take. The last part is theconclusion and the prospect of research in this field.