10. Risk Management: Foreign Exchange
Published Online: 13 DEC 2011
Copyright © 2011 John Wiley & Sons, Inc. All rights reserved.
The New CEO Corporate Leadership Manual: Strategic and Analytical Tools for Growth
How to Cite
Bragg, S. M. (2011) Risk Management: Foreign Exchange, in The New CEO Corporate Leadership Manual: Strategic and Analytical Tools for Growth, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118268391.ch10
- Published Online: 13 DEC 2011
- Published Print: 11 JUL 2011
Print ISBN: 9780470912874
Online ISBN: 9781118268391
- foreign currency;
- foreign exchange;
When dealing in foreign currencies, a company must determine its level of exposure, create a plan for how to mitigate that risk, engage in daily activities to implement the plan, and properly account for each transaction. Each of these steps is covered in this chapter. Determining the extent of a company’s currency risk can be a frustrating exercise for the foreign exchange specialist, who is often at the receiving end of a flood of disorganized information arriving from the accounting, budgeting, tax, and treasury departments. A variety of foreign exchange hedging strategies is noted in the chapter. The three main strategy groupings are to: not hedge the exposure, hedge the exposure through business practices and hedge the exposure with a derivative. The chapter describes seven strategies are all internal business practices that reduce currency exposure.
Controlled Vocabulary Terms
budgeting; Foreign exchange services; Risk management