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Foreign exchange risk: Relevance and management
Author(s) -
Hekman Christine R.
Publication year - 1981
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090020406
Subject(s) - hedge , foreign exchange , relevance (law) , foreign exchange risk , business , risk management , foreign exchange market , financial risk management , economics , financial economics , monetary economics , finance , exchange rate , political science , ecology , law , biology
Few senior corporate managers profess even a limited understanding of foreign exchange exposure management. This article offers a description of foreign exchange risk and the characteristics and costs of risk hedging alternatives. Because the costs of protection from exchange market fluctuations are company‐specific, the cost differentials explain why some managers hedge extensively while others choose to bear the risk.