What are some possible strategies that a firm can use to protect against exchange rate risk?© BrainMass Inc. brainmass.com October 9, 2019, 6:01 pm ad1c9bdddf
What are some possible strategies that a firm can use to protect against exchange rate risk?
Risk is the uncertainty that you may not earn your expected return on your investments. Multinational firms must constantly assess the business environments of the countries they are already operating in as well as the ones they are considering investing in. One of the most important international risks, which an organization faces, is exchange rate risk.
Exchange Rate Risk
Organization which invest internationally in today's increasingly global investment arena face the prospect of uncertainty in the returns after they convert the foreign gains back to their own currency. Unlike the past when most U.S. investors ignored international investing alternatives, investors today must recognize and understand exchange rate risk, which can be defined as the ...
Various techniques to combat exchange rate risk are included.