Foreign exchange risk management - the paradox

Article Abstract:

World currency changes either positively or negatively affect expected revenues of companies. Complexity of determining, classifying and managing economic exposure is restraining several managers to focus on the issue while disregarding the positive effect it may bring to the company's finance. But, facing the challenge and gaining greater understanding of the effects of currency movement provide enormous advantage. Determinate reasoning and agency theories help explain certain vague issues relating to currency exposure.

United Kingdom, Analysis, Economic aspects, Future earnings potential

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Foreign exchange risk management: evidence from Finland

Article Abstract:

Several Finnish companies demonstrate highly risk-managed foreign currency trading. Management attention is placed more on risk than on return in foreign exchange management through consistent monitoring and comparing of foreign exchange gains and losses. Hedging is high due to increased uncertainty implying rejection of a markka floatation. Forward contracts, monetary accounts and transfers are the most common utilized hedging devices.

Models, Finland, Evaluation, Prices and rates, Hedging (Finance), Markka (Finland)

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The management of foreign exchange risk in US multinational enterprises: an empirical investigation

Article Abstract:

Majority of United States' multinational enterprises are risk conscious as revealed in a foreign exchange risk study. Risk management is build upon economic exposures relative to the full accounting of competitive strategies and forecasting of future cash flows. Majority allow operational policies to affect their foreign exchange exposures. Overall, the companies are unified in advocating the importance of economic exposure management.

Multinational Corporations, Asset & Risk Management, Methods, Management, Foreign business enterprises

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