Applied Financial Mathematical Model for Derivative Instruments and Hedging Exchange Rate

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1 Vol. 3, No. 4, Octobr 2013, pp E-ISSN: , P-ISSN: HRMARS Applid Financial Mathmatical Modl for Drivativ Instrumnts and Hdging Exchang Rat Doan VAN DINH 1 Guangming GONG 2 1 Collg of Economics & Trad, Hunan Univrsity, Changsha, Hunan, China and Faculty of Financ & Banking, Ho Chi Minh City Univrsity of Industry, Vitnam citydinhninh@yahoo.com (Corrsponding author) 2 Businss School, Hunan Univrsity, Changsha, Hunan, China Abstract Ky words Currntly, th intrnational conomic transactions ar rgularly occurring. Th statistics of imports and xports wr publishd by th Gnral Administration of Customs that th total turnovr of th country's imports in yar of 2012 was billion U.S. dollars, incrasd by 12.1 % in comparison with th rsults of Thus, this is th 2nd yar in a row total xport and import turnovr of Vitnam xcdd $ 200 billion. This rsult shows that th forign currncy transactions of Vitnam conomy ar growing and xchang rats ar rgularly fluctuatd in th forign xchang markt. Th objctiv of th articl is application of drivativ instrumnts to hdg xchang rat fluctuation. From th data of actual conomic vnts, th articl uss th financial mathmatical formulas to valuat spot rat, forward rat, put and call options rat and finds out th rsults of th impact factors of xchang rat risk and th ffctivnss of th application of drivativ instrumnts for financial hdging. Th rsarch rsults show that th application of drivativ instrumnts is ncssary to minimiz financial risk and how to bring high conomic bnfits? Drivativs instrumnts, hdging, xchang rat, forward contracts, option contracts, swap contracts DOI: /IJARAFMS/v3-i4/405 URL: 1. Introduction 1.1. Background Th xchang rat is always a concrn in financial markts that may caus th xchang markt to b dclind unxpctdly, incrasd or rmain stabl. Rvnu of som xport and import companis ar incrasd or dcrasd by th xchang rat volatility. This is also th concrn of invstors bcaus th xchang rat can hav ngativ impact on conomic dvlopmnt and th xport and import companis. Th application of drivativ instrumnts for hdging th xchang rat will hlp xport and import companis hav many advantags, whil rvnu in dollars from sctors such as: fishris, rubbr, minrals, agricultural products, oil and gas tc. Particularly, in 2013, xport rvnu of Phuoc Hoa Rubbr Joint Stock Company (PHURUCO) is approximatly 50% of th total annual turnovr of th company; th xpctd xport rvnu of PHURUCO can rach about $36 million (rducd by a drop in rubbr pric). So, if th rats ris 1%, th intrst rat diffrnc of PHURUCO will b $7.5 billion. But PHURUCO has also had dbt in dollars that is about VND 250 billion (narly $12 million). This cas, th company will suffr rat losss of about 2.6 billion, if th rats ris 1%. Thrfor, if th rats ris 1%, th nt gains from forign xchang diffrncs of PHURUCO ar stimatd to b clos to VND 5 billion. Normally, th xchang rat fluctuation will mak th companis gt difficulty in dbts in dollars, mak th pric of importd goods ris and mak th Consumr Pric Indx (CPI) incras. Ths will hav ngativ impact on th conomy. In addition, th xchang rat volatility also maks nt sals volatility of forign

2 currncy. If som industry groups dpnd on importd raw matrials or forign currncy dbt, thy should apply drivativ instrumnts for hdging xchang rat risk such as: th xport and import companis, commrcial banks, forign currncy businss institutions tc. Th majority of ntrpriss in this sctor us forign currncy. Th xchang rat incras has an impact on som sctors of importd matrials or importd commoditis such as: stl or on th companis who hav a grat dbt ratio of dollars. On th contrary, this xchang rat incras brings bnfit to th xport companis. For th abov rasons, th rvnu and paymnt of forign currncy of th import and xport companis dpnd on th agrd conditions of transactions. Bcaus of xchang rat fluctuation, th valu of Vitnam's xport and import rvnu is also fluctuatd. So th companis nd to ngag in som hdging forms to minimiz financial risk du to xchang rat fluctuation Litratur Rviw Khaldoun M. Al-Qaisi (2012) rsarchd Th Dynamics of Forign Exchang Rat Risk Managmnt in Diffrnt Entrpriss. This study was rlatd to th forign xchang managmnt in companis with forign transactions. Th rsarch studid th managmnt masurs in th Jordan Company and forign xchang risk for its businsss. Th rsarch had mad som qustionnair in ordr to collct data from a random sampl. Th volum of sampls in this study was random sampls of 120 firms and th sampls wr applid sampling tchniqus to slct diffrnt sizs of businsss. At th sam tim, th rsarch basd on th sampls to handl th issus of xchang rat risk. From th collctd data, this study applid dscriptiv statistical modl to assss th lvl of th xchang rat risk of som typs of companis. Th study of th divrsity of lgal forms is usd by th companis. Th study was aimd at providing information on th bhavior of firms in th managmnt of forign xchang risk AI Wo ASAOLU Olufm had rsarch in (2010) Exchang Rat Risk Exposur of Nigrian Listd Firms. Th author also usd th sampling mthod of th company; th volum of sampls was 117 PC from 1998 to 2007 and usd dscriptiv statistical mthods to find th slop of th rgrssion quation. This rsult, th rsarch assssd profit shar on th xchang rat volatility and profit shar had bn usd by th company. Th study usd thr altrnativ currncy rats of xchang. It was th U.S. dollar, British Pounds and th ral xchang rat of Euro currncy to find out th disadvantags of th us of thr diffrnt currncy typs. This study also continud to study th diffrncs in xposur to th financial companis and non-financial companis. Howvr, th rsults of this rsarch did not show any diffrnc in risk prvntion modl btwn financial companis and non-financial companis to argu that financial firms should b hdging xchang risk. Th study concludd that xchang rat stability was a significant obstacl for businss oprations in Nigria listd companis. Andri Tudor Stancu also studid th titl (2010) Impact of Forign Exchang Risk on Intrnational Portfolios. Th purpos of this study was to illustrat th impact of forign xchang risk in th intrnational invstmnt portfolio as wll as varity of proprtis. This study was th approach of valu at risk (VaR) modl to calculat th rror - covarianc. Th author s analyss wr prformd basd on th rlationship with VaR. Th rsults of th study showd that currncy fluctuation had a significant impact on th intrnational portfolio and also showd that th unprdictabl natur of th xchang rat is non-xistnt and thir corrlation with profit of forign capital. In addition, th rsarch had also stablishd a gnral rul rlating to currncy risk which will b of grat us whn daling with th hdging. M. Nihat Solakoglu and Nazmi Dmir also had titl "Exchang-Rat Exposur and th Financial Sctor." Th two authors showd in this study th snsitivity analysis of companis in th financial sctor of Turky with th xchang rat fluctuation by using a markt modl. This study also idntifid som spcific lmnts of companis which only hdg th xchang rat according to statistical significanc. This study usd th logical binary modl. Th rsults of this study suggstd hdging rat and th liklihood of hdging xchang incrass. In addition, th authors also showd that th ROE was positiv impact on banking and insuranc sub-sctors. Bsid th abov studis, th authors blow also studid th xchang rat risk and inflation risk such as: th author Kashif Salm, Ph.D had (2013) study of "Inflation Risk, Exchang Rat Risk, and Asst Rturns: Evidnc From Kora, Malaysia, and Taiwan", th author Dilip K. Patro, John K. Wald, Yangru Wu (2002) had "Explaining xchang rat risk in world stock Markts: A Panl Approach", "intrst rat and forign xchang 255

3 risk xposurs of Australian banks: A Not" of Abul F. M. Shamsuddin (2009), th author Philipp Aghion, Philipp Bacchtta, Romain and Knnth Rogoff Ranci`r also had rsarch on th subjct (2009) " Exchang rat volatility and productivity growth: Th rol of financial dvlopmnt" tc. All ths rsarchs rviwd th purposs of xchang rat fluctuation and assssd th risk lvl. Simultanously, th studis also usd statistical mthods and sampling mthods. Howvr, ths studis didn t apply financial mathmatical modl for conomic transactions to minimiz forign xchang risk. For this rason, this papr adopts th financial mathmatical modl and statistical mthods to apply to conomic transactions and indicat application mthods for firms. 2. Mthodology of dtrmining xchang rat Whn th ntrpriss hav dmand for frqunt us of forign currncy transactions in th contxt of xchang rat fluctuation, thy nd to ffctivly us drivativ instrumnts to hdg risk for forign currncy capital. Ths instrumnts hlp th invstors and ntrpriss minimiz grat losss. Many forms of xchang rat hdging ar usd in th world. In Vitnam, som forms hav bn applid, such as forward contracts, option contracts or futurs contracts. Howvr, th us of mathmatical modl has not bn applid to masur forward rat and profit lvl through put and call option or short slling. Thrfor, th rsarch applis th mathmatical modl to find out thir usfulnss in th issus that is solvd blow: (1), why drivativ instrumnts hav bn popularly applid in th dvlopd countris and th Vitnam lgal framwork has also bn issud to apply, but th ntrpriss hav not still applid, lading to thir losss from diffrnc xchang rat and cannot manag th risk? (2), How ar th mathmatical modl applid to assss conomic ffctivnss? (3), How to gt profits from hdging forign xchang through this modl? (4), How is significanc of adopting this modl for conomic dvlopmnt? From ths issus abov, th rsarch mainly sts up financial mathmatical formulas to masur th valu of th xchang rat and th futur valu of th xchang rat, to b applid to conomic transactions and ths formulas hav also stimatd th valu of th forward contracts, swap contracts and option contracts. Ths ar drivativ instrumnts applid to hdg th xchang rat in Vitnam companis Forward contracts Th forward contracts ar applid to a big volum of goods transactions (common goods, financial assts, xchang rats tc.), and ar dtrmind at a tim in th futur at a fixd pric and ar agrd undr rgulations at th tim of contract signing. From dat of contract signing to th dat of contract maturity that is calld contracts priod and th contract s paymnt dat is calld dat of maturity. Th forward contracts for trading forign currncy or importd and xportd goods ar valuatd by forward rat formula as follows: (1), F is th forward rats (2), r d : th intrst rat of th valuatd currncy, i.. Vit Nam Dong (VND) rats (3), r y : th intrst rat of th basic currncy, i.. Unitd Stats Dollar (USD) rats (4), S is th currnt rats, such as S = USD/VND. (1 rd ) F s (1 r ) y Formula (1) Th formula (1) asssss as follows: First cas: if th intrst rat of th valuatd currncy is gratr than th intrst rat of th quotd currncy: 1 rd rd ry 1 rd 1 ry 1 F s. It is calld an incras in th forward rat point. 1 r y 256

4 Scond cas: if such intrst rat of th valuatd currncy is lss than th intrst rat of th quotd currncy: 1 rd rd ry 1 rd 1 ry 1 F s. It is calld dduction of forward rats point. 1 ry Combining two cass abov w s that th forward rat can b summarizd as follows: F S forward point, in which th forward point can b positiv ( ) or ngativ ( ) and is dtrmind basd on th currnt pric ratio and intrst rat diffrncs btwn th valuatd currncy and quotd pric. Assuming that th fiscal yar is 360 days and th intrst rat is prcntag pr yar. From ths cass, thr ar two formulas such as: formula (2) is th forward rat of purchas, formula (3) is th forward rat of sal. F s P P s p Lgt( VND) Lcv( NT ) Formula (2) F s s s ss Lcv( VND) Lgt( NT ) Formula (3) In which: (1), F : forward rat of purchas and s P P is th currnt rat of purchas, (2), F : forward rat of sal and s s s is th currnt rat of sal, (3), Lgt (VND ) : th dposit intrst rat and Lcv(VND ) is th loan intrst rat in Vit Nam Dong (VND), (4), Lgt (NT) : th dposit intrst rat and, Lcv(NT) is th loan intrst rat in forign currncy, (5), N is th numbr of days of th forward contracts Swap xchang rat Swaps ar forign xchang transactions that simultanously includ both transactions: purchas and sal of th sam amount of currncy among diffrnt countris, in which th maturity of two diffrnt transactions and rats of two transactions ar dtrmind at th tim of th contract signing. Charactristics of forign xchang (FOREX) Swaps. (1), In th swap contracts, if th first partnr carris out th first purchas and last sal, th scond partnr will carry out th first sal and last purchas (or vic vrsa). (2), Purchas and sal ar signd on th sam day of th contract signing dat (trading days) in th sam contract and with th sam partnr (or vic vrsa). (3), Th amount of purchas and sal of currncy is qual for both sids (purchas and sal) of swap contracts. Purchas valu and sal valu is on th sam dat. Th Swap xchang rat is valuatd by formula 2 and Option contracts Call option contracts: an agrmnt allows a buyr having a call option to buy a sllr s proprty at a fixd pric on maturity of th contract. Put option contracts: an agrmnt allows a sllr having put option to sll his proprty to a buyr at fixd pric on th maturity of th contract. This contract charactristic is not binding on call and put option, but a buyr of a call option or a sllr of a put option has to pay transaction fs bfor or on th contract maturity. Th formula of option contracts as follows: Th option valu of th Europan modl is dtrmind according to th following formula 6: C T T S, T, E max 0, S1 b E1 a T P S, T, E max 0, E1 a S1 b and T formula (6) 257

5 In which: C : Call option, P : Put option, S: currnt xchang rat, E intr-bank rat, a: intrst rat of currncy A, b: intrst rat of currncy B and T: th contract priod. Th dtrmind option valu of Black- Schols modl 1 : C S -at -at -bt d - E Nd and P E Nd - S Nd formula (7) -bt N In which: (1), C : Pric of call option of Europan modl (2), S: Spot rat btwn currncy A and currncy B (3), E: Ralizd xchang rat (4), T: Th duration of contract, T = 360 days. (5), a: Unintrruptd compound intrst of currncy A (Compound intrst is dfind as a trm intrst rat is calculatd grat intrst rat to infinity) (6), b: Unintrruptd compound intrst of currncy B (7), : is th standard dviation of annual prcntag changs compard with th spot rat. (8), N d 1 and N : th valu of th standard cumulativ distribution function is dfind as follows: d 2 2 lns / E a b 2 d1 and d 2 d1 - T T formula (8) (9), =? Now is calculatd from compound intrst as follows: If yar is dividd into m priod to calculat intrst rat and unchangd intrst rat pr ach yar is r, th intrst rat pr priod (r/m) and th procds aftr N yars is: C = A(1+r/m) N.m, w s that whn m incrass, C also incrass. In which: (1), A is th initial amount (2), r is th intrst rat pr priod (3), N is th numbr of dposit s trm (4), C is procds aftr N trms Nm r Put ; Sm A 1.Thn that m lim S m m lim A 1 m r m m r Nm m r 1 lim m 1 m r Nr t S that 1 1 Nr lim 1 lim 1 ; lim Sm A m m t t m r Thrfor, C cannot incras to infinity. Now , formula of unintrruptd compound intrst is S = A N.r Th Black - Schols modl is that th pric of th call option Europan modl dpnds on risk-fr intrst rat btwn two countris, th duration of th contract, th standard dviation of xchang rat chang btwn two diffrnt currncis and th implmntd xchang rat in comparison with th spot rat. This modl is basd on assumptions as follows: (1), Intrst rats rmain unchangd and dposit intrst rat and loan intrst rat is th sam. (2), Thr ar no taxs or transaction costs. 1 Black-Schols modl was awardd th Nobl Priz in conomics in

6 (3), Th diffrnc in rats follows ruls of th standard distribution. (4), Th standard dviation rmains constant throughout th trm of th contract. 3. Data of conomic vnts Th data on conomic vnts is applid by th financial mathmatical formula for dtrmining spot rat and forward rat. Th xchang transactions can b don on th basis of spot rat or forward rat. Forward rat may b gratr than or lss than th spot rat. In addition, xchang rat is also applid put and call option or is th applicabl mthod of swap rat. In cas, th xchang rat is applid put and call options, this mthod is diffrnt with application of forward rat. Bcaus, thy apply th mthods of put and call, thy ar not th obligation to pay this transaction in th futur if thy know forign xchang transaction with thir uncrtainty bnfit. Thy also apply swap rat in transactions for xportd and importd goods with th commrcial banks. W can apply ths mthods for forign xchang transactions and ths issus will b mad blow. Whn applying th Black-Schols modl, w nd hav th data of xchang rat volatility in on yar in ordr to calculat th standard dviation of annual prcntag changs that is compard with th spot rat. This articl, th author uss data of xchang rat volatility of th Joint stock Commrcial Bank for Forign Trad of Vitnam for a yar. This data is th basis to calculat th standard dviation of annual prcntag changs in th spot rat. Tabl 1. Exchang rat volatility of Joint stock commrcial Bank for Forign Trad of Vitnam (Unit: VND/$1) Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas From 1/1/ to 29/2/2012 From 1/3/ to 30/4/2012 From 1/5/ to 30/6/2012 From 1/7/ to 31/8/2012 From 1/9/ to 31/10/2012 From 1/11/ to 31/9/ ,036 21,030 20,860 20,800 20,930 20,850 20,920 20,860 20,900 20,860 20,865 20,825 21,036 21,030 20,850 20,790 20,900 20,840 20,910 20,850 20,910 20,870 20,865 20,825 21,036 21,030 20,850 20,790 20,870 20,820 20,930 20,870 20,910 20,870 20,865 20,825 21,036 21,030 20,850 20,790 20,870 20,820 20,920 20,860 20,910 20,870 20,865 20,825 21,036 21,030 20,850 20,790 20,870 20,820 20,920 20,860 20,910 20,870 20,865 20,825 21,036 21,030 20,860 20,800 20,870 20,820 20,910 20,860 20,910 20,870 20,865 20,825 21,036 21,030 20,860 20,800 20,885 20,835 20,910 20,860 20,910 20,870 20,880 20,830 21,036 21,030 20,860 20,800 20,890 20,830 20,900 20,860 20,900 20,860 20,865 20,825 21,036 21,030 20,870 20,810 20,880 20,830 20,900 20,860 20,875 20,835 20,865 20,825 21,036 21,030 20,870 20,810 20,870 20,820 20,900 20,860 20,880 20,840 20,865 20,825 21,036 21,030 20,870 20,810 20,870 20,820 20,890 20,855 20,875 20,835 20,865 20,825 21,036 21,030 20,870 20,810 20,870 20,820 20,885 20,850 20,875 20,835 20,865 20,825 21,036 21,030 20,870 20,810 20,870 20,820 20,875 20,845 20,875 20,835 20,865 20,825 21,036 21,030 20,870 20,810 20,870 20,820 20,875 20,845 20,875 20,835 20,865 20,825 21,036 21,030 20,850 20,790 20,870 20,820 20,875 20,845 20,870 20,830 20,870 20,830 21,034 21,028 20,850 20,790 20,870 20,820 20,875 20,845 20,870 20,830 20,885 20,835 21,020 20,960 20,850 20,790 20,870 20,820 20,870 20,840 20,870 20,830 20,885 20,835 20,930 20,840 20,850 20,790 20,870 20,820 20,865 20,835 20,870 20,830 20,885 20,835 20,910 20,820 20,870 20,810 20,870 20,820 20,860 20,820 20,870 20,830 20,875 20,835 21,036 20,736 20,870 20,810 20,870 20,820 20,865 20,835 20,870 20,830 20,875 20,835 21,036 20,736 20,890 20,830 20,870 20,820 20,865 20,835 20,870 20,830 20,875 20,835 21,036 20,736 20,950 20,850 20,870 20,820 20,865 20,835 20,870 20,830 20,880 20,840 21,036 20,736 20,920 20,860 20,870 20,820 20,865 20,835 20,870 20,830 20,880 20,840 21,036 20,736 20,920 20,860 20,880 20,830 20,910 20,860 20,870 20,830 20,880 20,840 21,036 20,736 20,920 20,860 20,880 20,830 20,910 20,860 20,870 20,830 20,880 20,840 21,036 20,736 20,920 20,860 20,880 20,830 20,900 20,865 20,865 20,825 20,880 20,840 21,036 20,736 20,900 20,840 20,880 20,830 20,885 20,850 20,865 20,825 20,875 20,835 21,036 20,736 20,860 20,800 20,880 20,830 20,885 20,850 20,865 20,825 20,870 20,830 21,036 20,736 20,860 20,800 20,880 20,830 20,885 20,850 20,870 20,830 20,870 20,830 21,036 20,936 20,860 20,800 20,890 20,840 20,885 20,850 20,870 20,830 20,870 20,830 21,036 20,986 20,860 20,800 20,890 20,840 20,885 20,850 20,900 20,860 20,870 20,830 20,860 20,800 20,860 20,800 20,890 20,840 20,880 20,845 20,910 20,870 20,870 20,830 20,850 20,790 20,860 20,800 20,890 20,840 20,880 20,845 20,910 20,870 20,865 20,825 20,850 20,790 20,860 20,800 20,890 20,840 20,875 20,845 20,910 20,870 20,865 20,825 20,850 20,790 20,860 20,800 20,950 20,880 20,880 20,840 20,910 20,870 20,865 20,825 20,850 20,790 20,875 20,815 20,990 20,920 20,880 20,840 20,910 20,870 20,880 20,830 20,860 20,800 20,870 20,810 21,036 20,966 20,880 20,840 20,910 20,870 20,880 20,830 20,860 20,800 20,870 20,810 21,036 20,966 20,880 20,840 20,900 20,860 20,880 20,830 20,870 20,810 20,870 20,810 21,036 20,966 20,880 20,840 20,875 20,835 20,880 20,

7 Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas From 1/1/ to 29/2/2012 From 1/3/ to 30/4/2012 From 1/5/ to 30/6/2012 From 1/7/ to 31/8/2012 From 1/9/ to 31/10/2012 From 1/11/ to 31/9/ ,870 20,810 20,860 20,810 21,036 20,966 20,870 20,840 20,880 20,840 20,865 20,825 20,870 20,810 20,870 20,810 21,036 20,966 20,870 20,840 20,875 20,835 20,860 20,820 20,870 20,810 20,870 20,810 21,010 20,940 20,870 20,840 20,875 20,835 20,860 20,820 20,870 20,810 20,870 20,810 20,960 20,890 20,870 20,840 20,875 20,835 20,865 20,825 20,870 20,810 20,870 20,810 21,000 20,930 20,870 20,840 20,875 20,835 20,865 20,825 20,870 20,810 20,870 20,810 20,990 20,920 20,870 20,840 20,870 20,830 20,865 20,825 20,850 20,790 20,870 20,810 20,990 20,930 20,865 20,835 20,870 20,830 20,865 20,825 20,850 20,790 20,870 20,810 20,990 20,930 20,860 20,830 20,870 20,830 20,865 20,825 20,850 20,790 20,870 20,810 20,990 20,930 20,860 20,830 20,870 20,830 20,865 20,825 20,850 20,790 20,870 20,810 20,980 20,930 20,860 20,830 20,870 20,830 20,870 20,830 20,870 20,810 20,870 20,810 20,970 20,920 20,860 20,830 20,870 20,830 20,870 20,830 20,870 20,810 20,870 20,810 20,970 20,920 20,860 20,830 20,870 20,830 20,870 20,830 20,890 20,830 20,870 20,810 20,940 20,890 20,855 20,820 20,870 20,830 20,870 20,830 20,950 20,850 20,870 20,810 20,940 20,880 20,855 20,820 20,870 20,830 20,870 20,830 20,920 20,860 20,870 20,810 20,940 20,880 20,925 20,870 20,870 20,830 20,865 20,825 20,920 20,860 20,880 20,830 20,940 20,880 20,880 20,830 20,870 20,830 20,865 20,825 20,920 20,860 20,880 20,830 20,940 20,880 20,880 20,830 20,865 20,825 20,865 20,825 20,920 20,860 20,880 20,830 20,910 20,850 20,880 20,830 20,865 20,825 20,855 20,815 20,900 20,840 20,930 20,850 20,920 20,860 20,880 20,830 20,865 20,825 20,860 20,810 20,850 20,790 20,930 20,850 20,920 20,860 20,880 20,830 20,870 20,830 20,860 20,810 20,870 20,810 20,930 20,850 20,920 20,860 20,875 20,835 20,870 20,830 20,860 20,810 20,930 20,850 20,920 20,860 20,875 20,835 20,865 20,825 20,855 20,815 20,880 20,840 Sourc: Priod of xportd and importd goods ar always longr than th priod of goods in th domstic businss activitis bcaus xportd and importd goods hav purchas phas and sal phass. For xport businss, th goods ar purchasd in th domstic markt and sold in forign markts, for import businss, th goods ar bought in forign markts to sll in domstic markt. Dlivry tim and paymnt trm: Th import tim and xport tim of goods and th paymnt trm ar oftn not idntical and tak a long tim. Assuming that th conomic vnts of th goods import company or goods Exports Company occurrd in January, but th company paid in Sptmbr. During this priod, th xchang rat has grat volatility. Th xportd and importd goods affct firm s bnfit. It mans that if th xchang rat incrass, th bnfit of xportrs is incrasd but importrs ar unprofitabl and vic vrsa. Data tabls of xchang rat and othr data tabls blow ar usd to valuat th factors affcting th profitability of importrs and xportrs. Tabl 2. Exchang rat fluctuation in 01/2013 and 09/2013, Unit: VND/USD Purchas Sal Purchas Sal Purchas Sal Purchas Sal From 1/01/2013 to15/01/2013 From 16/01/2013 to 31/01/2013 From 1/09/2013 to 15/09/2013 From 16/09/2013 to 30/09/ , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Sourc: 260

8 Collcting data blow is to compar USD LIBOR intrst rat with VND intrst rat, and it is basis to valuat forward rat. Tabls 3. USD LIBOR intrst rat maturity: 12 months First rat pr month Prcntag First rat pr yar Prcntag Octobr 01, % January 02, % Sptmbr 02, % January 03, % August 01, % January 04, % July 01, % January 04, % Jun 03, % January 02, % May 01, % January 02, % April 02, % January 02, % March 01, % January 03, % Fbruary 01, % January 04, % January 02, % January 02, % Sourc: In addition, th articl nds to collct th data rlatd to th dposit intrst rat of VND and dollar and loan intrst rat of VND and dollar. Th intrst rats in th tabl ar slctd to valuat rlatd xchang rat volatility in intrst rats. Tabl 4: dposit intrst rat of VND and Dollar Tabl 5: loan intrst rat of VND and Dollar Trm VND USD Trm VND (%/yar) USD (%/yar) Trm dposits Stat Bank 1 month 5.00% 0.25% Short trm 9.75% 4.50% 2 months 6.50% 0.25% 3 months 6.80% 0.25% Mdium and long trm 12.15% 6.50% 6 months 7.00% 0.25% Commrcial banks 9 months 7.00% 0.25% Short trm 10.50% 5.50% 12 months 7.50% 0.25% Mdium and long trm 12.50% 6.75% Sourc: Th data abov is prliminary to stimat th rat and profitability of th businss and th factors that influnc th rat through th following rsults. 4. Rsults and Discussion Data tabl No 3 is usd to calculat th avrag rat of th January and Sptmbr by formula X n i 1 N x i In which: N 1 n, X M 1 is avrag xchang rat of purchas in January, P X M 1 is avrag xchang S rat of sal in January; X M 9 is avrag xchang rat of purchas in Sptmbr, P X M 9 is avrag xchang S rat of sal in Sptmbr and also is spot rat. X M1P VND20,822/$1 ; X M1S VND20,862/$1 ; X M 9P VND21,091/$1 ; X M 9S VND21,156/$1. Basd on ths rsults, chang prcntag of th xchang rat of purchas and sal is calculatd by th formulas: % XM1-P - yi ; i 1 n % y Y i P i ; XM1-S - yi ; i 1 n y Y i S In which: % Y i P 2012 is chang prcntag of xchang rat of purchas in 2012, % Y i S 2012 is chang prcntag of xchang rat of sal in 2012 that ar compard with spot rat ar X M1P VND20,822/ $1 and X, th articl has rsult tabl as follows: M 1S VND20,862/$1 i 261

9 262 Tabl 6. Chang prcntag of xchang rat of purchas and sal Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas From 1/1/ to 29/2/2012 From 1/3/ to 30/4/2012 From 1/5/ to 30/6/2012 From 1/7/ to 31/8/2012 From 1/9/ to 31/10/2012 From 1/11/ to 31/9/ % % 0.299% 0.107% 0.059% % 0.011% % 0.011% % 0.179% % % % 0.348% 0.155% 0.107% % 0.059% % % % 0.179% % % % 0.348% 0.155% 0.203% 0.011% % % % % 0.179% % % % 0.348% 0.155% 0.203% 0.011% 0.011% % % % 0.179% % % % 0.348% 0.155% 0.203% 0.011% 0.011% % % % 0.179% % % % 0.299% 0.107% 0.203% 0.011% 0.011% % % % 0.179% % % % 0.299% 0.107% 0.131% % 0.011% % % % 0.155% % % % 0.299% 0.107% 0.155% % 0.011% % 0.011% % 0.179% % % % 0.251% 0.059% 0.155% % 0.011% % 0.131% % 0.179% % % % 0.251% 0.059% 0.203% 0.011% 0.011% % 0.107% % 0.179% % % % 0.251% 0.059% 0.203% 0.011% 0.035% % 0.131% % 0.179% % % % 0.251% 0.059% 0.203% 0.011% 0.059% % 0.131% % 0.179% % % % 0.251% 0.059% 0.203% 0.011% 0.083% % 0.131% % 0.179% % % % 0.251% 0.059% 0.203% 0.011% 0.083% % 0.131% % 0.179% % % % 0.348% 0.155% 0.203% 0.011% 0.083% % 0.155% % 0.155% % % % 0.348% 0.155% 0.203% 0.011% 0.083% % 0.155% % 0.131% % % % 0.348% 0.155% 0.203% 0.011% 0.107% % 0.155% % 0.131% % 0.107% % 0.348% 0.155% 0.203% 0.011% 0.131% % 0.155% % 0.131% % 0.203% 0.011% 0.251% 0.059% 0.203% 0.011% 0.203% 0.011% 0.155% % 0.131% % 0.609% 0.416% 0.251% 0.059% 0.203% 0.011% 0.131% % 0.155% % 0.131% % 0.609% 0.416% 0.155% % 0.203% 0.011% 0.131% % 0.155% % 0.131% % 0.609% 0.416% 0.059% % 0.203% 0.011% 0.131% % 0.155% % 0.107% % 0.609% 0.416% 0.011% % 0.203% 0.011% 0.131% % 0.155% % 0.107% % 0.609% 0.416% 0.011% % 0.155% % 0.011% % 0.155% % 0.107% % 0.609% 0.416% 0.011% % 0.155% % 0.011% % 0.155% % 0.107% % 0.609% 0.416% 0.011% % 0.155% % % % 0.179% % 0.107% % 0.609% 0.416% 0.107% % 0.155% % 0.059% % 0.179% % 0.131% % 0.609% 0.416% 0.299% 0.107% 0.155% % 0.059% % 0.179% % 0.155% % 0.609% 0.416% 0.299% 0.107% 0.155% % 0.059% % 0.155% % 0.155% % % % 0.299% 0.107% 0.107% % 0.059% % 0.155% % 0.155% % % % 0.299% 0.107% 0.107% % 0.059% % 0.011% % 0.155% % 0.299% 0.107% 0.299% 0.107% 0.107% % 0.083% % % % 0.155% % 0.348% 0.155% 0.299% 0.107% 0.107% % 0.083% % % % 0.179% % 0.348% 0.155% 0.299% 0.107% 0.107% % 0.083% % % % 0.179% % 0.348% 0.155% 0.299% 0.107% % % 0.107% % % % 0.179% % 0.348% 0.155% 0.227% 0.035% % % 0.107% % % % 0.155% % 0.299% 0.107% 0.251% 0.059% % % 0.107% % % % 0.155% % 0.299% 0.107% 0.251% 0.059% % % 0.107% % 0.011% % 0.155% % 0.251% 0.059% 0.251% 0.059% % % 0.107% % 0.131% % 0.155% % 0.251% 0.059% 0.251% 0.059% % % 0.107% % 0.107% % 0.179% % 0.251% 0.059% 0.251% 0.059% % % 0.107% % 0.131% % 0.203% 0.011% 0.251% 0.059% 0.251% 0.059% % % 0.107% % 0.131% % 0.203% 0.011% 0.251% 0.059% 0.251% 0.059% % % 0.107% % 0.131% % 0.179% % 0.251% 0.059% 0.251% 0.059% % % 0.107% % 0.131% % 0.179% % 0.251% 0.059% 0.251% 0.059% % % 0.107% % 0.155% % 0.179% % 0.348% 0.155% 0.251% 0.059% % % 0.131% % 0.155% % 0.179% % 0.348% 0.155% 0.251% 0.059% % % 0.155% % 0.155% % 0.179% % 0.348% 0.155% 0.251% 0.059% % % 0.155% % 0.155% % 0.179% % 0.348% 0.155% 0.251% 0.059% % % 0.155% % 0.155% % 0.155% % 0.251% 0.059% 0.251% 0.059% % % 0.155% % 0.155% % 0.155% % 0.251% 0.059% 0.251% 0.059% % % 0.155% % 0.155% % 0.155% % 0.155% % 0.251% 0.059% % % 0.203% 0.011% 0.155% % 0.155% % 0.059% % 0.251% 0.059% % % 0.203% 0.011% 0.155% % 0.155% % 0.011% % 0.251% 0.059% % % % % 0.155% % 0.179% % 0.011% % 0.155% % % % 0.155% % 0.155% % 0.179% % 0.011% % 0.155% % % % 0.155% % 0.179% % 0.179% %

10 Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas From 1/1/ to 29/2/2012 From 1/3/ to 30/4/2012 From 1/5/ to 30/6/2012 From 1/7/ to 31/8/2012 From 1/9/ to 31/10/2012 From 1/11/ to 31/9/ % % 0.155% % 0.059% % 0.155% % 0.179% % 0.227% 0.035% 0.107% % 0.059% % 0.011% % 0.155% % 0.179% % 0.251% 0.059% 0.348% 0.155% 0.059% % 0.011% % 0.155% % 0.155% % 0.251% 0.059% 0.251% 0.059% 0.059% % 0.011% % 0.131% % 0.155% % 0.251% 0.059% 0.059% % 0.011% % 0.131% % 0.179% % 0.227% 0.035% 0.107% % Th similar mthod abov, th articl also has th rsult of chang prcntag of xchang rat of purchas in 2012 and chang prcntag of xchang rat of sal in 2012 that ar compard with spot rat ar X VND21,091/ $1 and X $1 as follows: M 9P M 9S VND21,156/ Tabl 7. Chang prcntag of xchang rat of purchas and chang prcntag of xchang rat of sal Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas From 1/1/ to 29/2/2012 From 1/3/ to 30/4/2012 From 1/5/ to 30/6/2012 From 1/7/ to 31/8/2012 From 1/9/ to 31/10/2012 From 1/11/ to 31/9/ % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % 263

11 Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas Sal Purchas From 1/1/ to 29/2/2012 From 1/3/ to 30/4/2012 From 1/5/ to 30/6/2012 From 1/7/ to 31/8/2012 From 1/9/ to 31/10/2012 From 1/11/ to 31/9/ % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % From th data of tabl 6 and tabl 7, th standard dviations of annual chang prcntag compard with th spot rat ar valuatd by statistical softwar of xcl as follows: Tabl 8. Standard Dviation of Annual Chang Prcntag Th chang prcntag of xchang rats compar with spot rats in January Standard Error Standard Dviation Sampl Varianc E-06 Th chang prcntag of xchang rats compar with spot rats in January Standard Error Standard Dviation Sampl Varianc E-06 Th chang prcntag of xchang rats compar with spot rats in Sptmbr Standard Error Standard Dviation Sampl Varianc E-06 Th chang prcntag of xchang rats compar with spot rats in Sptmbr Standard Error Standard Dviation Sampl Varianc E-06 Minimum Minimum Minimum Minimum Maximum Maximum Maximum Maximum Count (N) 366 Count (N) 366 Count (N) 366 Count (N) 366 Confidnc Confidnc Confidnc Confidnc Lvl (95.0%) Lvl (95.0%) Lvl (95.0%) Lvl (95.0%) This tabl indicats Standard Dviation of th chang prcntag of xchang rats and th chang prcntag of xchang rats in January and Sptmbr in ordr to valuat th valu of put and call option of forign currncy Evaluation of forward rats Assuming that x amount of U.S. dollar is carrid out with maturity dat in Sptmbr; priod of forward contracts is 9 months. Forward contracts ar signd in January. This cas, forward rats ar valuatd on basis of spot rats in January and somthing ls that ar, from th tabl of X M1P VND20,822/$1, X M1S VND20,862/$1 dposit intrst rats of VND and Dollar and th tabl of loan intrst rats of VND and Dollar, w hav Lgt (VND) =7.5%/a yar and Lcv (NT) = 6.75%/a yar. Th forward rats of purchas ar valuatd by 20, % 6.75%) 270 F 20,822 VND20,823/$1 (No: 1) p

12 Also from th tabl of dposit intrst rats of VND and Dollar and th tabl of loan intrst rats of VND and Dollar, w hav th forward rats of sal is valuatd basd on Lcv (VND ) =12. 15%/a yar and Lgt (NT) = 0.25%/a yar. 20, % 0.25% 270 F 20,862 VND20,881/$1 (No: 2) s Ths rsults can b applid to purchas and sll following forward rats. Or thy can b applid to xchang rat of put and call option. If th firm applis forward rats for forign currncy transactions in th import and xport, th firm can apply swap rat mthod. It mans that th firm purchass USD from th Commrcial Bank with forward rats of VND20,823/$1 to pay th xportr in th futur. Assuming that, th firm must pay for th commoditis from th forign countris in Sptmbr. Howvr, in Sptmbr th spot rat is X M 9P VND21,091/ $1lading to hav diffrnt xchang rats. If call P is profit function, V is volum of USD purchas and R is a diffrnt lvl of forward rats and spot rats, P V R. This cas, th firm has th profit from volum of USD purchas, P p p qualing to V x (VND21,091/$1-VND20,823/$1) = V x VND286/$1. If h purchass $200,000,000, h will gt th profit of VND 5, 360,000,000, quivalntly to $254, with th xchang rat is $1/VND21,091. This formula indicats that P is appurtnant to V, if V incrass, P will incras with th fixd R. In th cas of USD sal, th firm can sll USD for th commrcial bank with forward rat of VND 20,881/$1 in January, also lading to hav a diffrnc lvl of forward rat and spot rat of X M1S VND20,862/$1 in January. If calling R is diffrnc lvl, V is volum of USD sal and P is th profit from sal of forign currncy, Ps Vs R. This cas, th firm has th profit of s V s VND19 / $ 1. It mans that if h slls $1, thn h will gt profit of VND19. Assuming that h slls $500,000,000, h will gt profit of VND 9,500,000,000, quivalntly to $455, with th xchang rat of $1/VND20,862. Bsids, th rsults abov ar basis to valuat th profit of put and call option activitis. This cas, th invstors should apply th Black-Schols modl to giv dcisions of invstmnt or non-invstmnt. Bcaus, if thy hav put or call option, thy can purchas or not purchas, or thy can sll or not sll. Thrfor, thy hav to know thir profit in futur by th way of applying Option pricing of th Black - Schols modl for short slling activitis. In th cas of USD purchas in January, th d1 and d2 ar calculatd by th formula 8 as follows: Th d 1 and d 2 ar calculatd with data as follows: E = VND20,881/$1 (from No2), T=270/360 = 0,75, a = 7.50%/yar = 0.625%/month (VND), b = %/month (USD) (Tabl: USD LIBOR intrst rat - maturity 12 months), , (Tabl: Standard Dviation of Annual Prcntag Changs) and S = X M1S VND20,862/$1. S that: d ln ,862/ 20, % % and d VND0.609/$1 From th rsults abov, w hav put option: (Sal) VND0.6/$ % %0.75 p 20, , VND227.57/$1 This rsult shows that if th firm purchass $1, h will gt profit of VND Assuming that h purchass $3,000,000, h will hav a profit of VND682,712,686, quivalntly to $32,725 (xchang rat of VND20,862/$1). If calling P is profit, p is unit of profit pr $1 and V is volum of USD purchas, th profit function is P = V x p and V incrass lading to P also incras ccorrspondingly. In th cas of call option -bt -at (purchas), w can apply th formulac S Nd1 - E Nd 2. Howvr th data ar diffrnt such as: (Tabl: Standard Dviation of Annual Prcntag Changs). S = X M1P VND20,822/ $1 and E = VND20,823/$1 (from No1) as follows: 265

13 d ln ,822/ 20, % % and d VND0.217/$1 Th rsults abov, w also hav call option: VND0.215/$ % % 0.75 C 20, ( 0.215) - 20,823 (-0.217) VND42.67/$1 Th rsult shows that if th firm slls $1, h will gt profit of VND42.6. Assuming that h purchass $3,000,000, h will hav a profit of VND128,000,536, quivalntly to $6, (xchang rat of VND20,822/$1). If calling P is profit, C is unit of profit pr $1 and V is volum of USD sal, th profit function is P = V x C and V incrass lading to P also incras corrspondingly. Bsids, th data in th tabl of xchang rat fluctuation in 01/2013 and 09/2013, Unit: VND/USD and th tabl of xchang rat volatility of joint stock commrcial bank for forign trad of Vitnam ar rsults of avrag xchang rat ach month (from January to Dcmbr in 2012). Ths rsults ar compard with rsult of avrag xchang rat in Sptmbr and January, Th comparison rsults indicat diffrnc lvls of xchang rat and thir impact on th conomy. Months In 2012 Avrag xchang rat lvl of forign currncy sal Tabl 9. Evaluation of avrag diffrnc lvl of xchang rat Avrag xchang rat lvl of forign currncy purchas Comparison of Avrag xchang rat in 9/2013 Avrag diffrnc Avrag diffrnc lvl of xchang lvl of xchang rat of forign rat of forign currncy sal currncy purchas Comparison of Avrag xchang rat in 1/2013 Avrag diffrnc Avrag diffrnc lvl of xchang lvl of xchang rat rat of forign of forign currncy currncy sal purchas 1 21,028 20, ,874 20, ,873 20, ,878 20, ,878 20, ,964 20, ,890 20, ,874 20, ,881 20, ,880 20, ,872 20, ,867 20, Ths rsults ar usd to valuat th impact of xchang rat volatility on th profitability of th firms as wll as its impact on th conomy and ths issus ar discussd blow Discussions Currncy fluctuation is th invitabl rsult of th systm of floating xchang rat that is standards of th dvlopd countris. Th xchang rat of th currncy is affctd by basic factors and tchnical factors such as: th supply and dmand rlationship of th two currncis with othr countris or th xprssion of th conomy such as: th inflation factor, th diffrnc in intrst rat tc. Ths factors ar constantly fluctuatd lading to th valu of th currncy is always varid and ths factors affct th forign currncy transactions such as import and xport businss, forign xchang, forign invstmnt tc Export businss Th data in th tabl of "Evaluation of an avrag lvl of xchang rat diffrnc" is to compar btwn th avrag xchang rat from January 2012 to Dcmbr 2012 with th avrag xchang rat in January and Sptmbr Th purpos of this tabl is to rsarch th dgr of th xchang rat fluctuation, th firms xport or import commoditis in January 2013 and can b paid in Sptmbr This 266

14 assumption is to assss th lvl of th impact of xchang rat volatility on corporat profit and conomic influnc. According to statistics from th Gnral Dpartmnt of Vitnam Customs, th main commoditis in Sptmbr, 2012 only slightly dcrasd by 2.22% in comparison with last month. Th turnovr is 6.66 billion U.S. dollars, making up 68 % ovr total xport turnovr of th country. Howvr, th avrag lvl of xport turnovr is up to billion U.S. dollars in 9 months in 2012, up 24.73% compard with th sam priod in 2011, making up 67.63%. This data, th articl asssss th affcting factors as follows: From th data in tabl of xchang rat volatility of joint stock commrcial bank for forign trad of Vitnam, avrag xchang rat of sal in 9 months is calculatd and is VND20,904/$1 in This avrag xchang rat of sal is compard with an avrag xchang rat of sal in January, 2013, avrag xchang rat of sal in January is VND20,862/$1 lading to diffrnc lvl is -VND42/$1 (VND20,862/$1- VND20,904/$1 in 2012). If total USD is sold in January, how dos this diffrnc lvl affct? W can s th tabl blow. Tabl 10. Export turnovr of 9 months in 2012 Commodity Avrag $ valu pr month Th total valu (Unit: 1,000) Th diffrnc lvl of VND valu (Unit: 1,000) Equivalntly 2 to USD (Unit: 1,000) Th cashws 121,040 1,089, ,753,288-2, Th coff 316,275 2,846, ,552,131-5, Th ta 17, , ,752, Th ppprcorn 70, , ,763,378-1, Th ric 313,122 2,818, ,360,164-5, Th cassava and cassava products 117,570 1,058, ,441,517-2, Th coal 98, , ,253,192-1,785.7 Th crud oil 701,033 6,309, ,990,466-12,702.1 Total: -663,866,804-31,821.8 Th rsult shows th firms financial losss whn th xchang rat is varid within 4 months such as: th cashws businss firm has avrag rvnus of $121,040,000 in Sptmbr 2012 and total rvnus of $ 1,089,364,000 for 9 months. Th firm rsrv forign currncy within 4 months, h losss $ 1,193,140 bcaus sal xchang rat in Sptmbr, 2012 is highr than sal xchang rat in January, Among th firms abov, th coff businss firm, th ric businss firm and th crud oil firm hav gratst losss that ar $5,730,620, $5,673,4800 and $12, If th financial losss ar stimatd for th whol conomy, ths financial losss ar multiplid. In cas abov, if th firm applis financial mathmatical modl for hdging accounting, th firm minimizs financial risk as th rsult of No: 2, th forward rat is VND20,881/$1 lading to th diffrnc lvl of xchang rat btwn avrag sal xchang rat in Sptmbr, 2012 and avrag sal xchang rat in January, 2013, that ar -VND23/$1(VND20,881/$1- VND20,904/$). This rsult, th lvl of th xchang rat risk is rducd to VND19/$1 (-VND23/$1-(-VND43/$1) and also is profit of th firm whn h applis forward rat, how much dos h has? th rsult is indicatd blow. Commodity Tabl 11. Profit of applid forward rat 3 Th total xport output (Unit: ton) Avrag $ valu pr month Th total valu (Unit: 1000) Th diffrnc lvl of VND valu (Unit: 1000) Equivalntly 4 to USD (Unit: 1,000) Th cashws 160, ,040 1,089, ,697, Th coff 1,338, ,275 2,846, ,083,107 2, Th ta 106,062 17, , ,054, Th ppprcorn 93,304 70, , ,107, Th ric 6,231, ,122 2,818, ,543,884 2, Th cassava and cassava products 3,439, ,570 1,058, ,104, With xchang rat of $1/VND20,862 3 Som commoditis ar only rprsntation to illustrat in articl 4 With xchang rat is $1/VND20,