12.17 Managing foreign exchange risk
Preparation for this section is a little revision from Chapter 6 on the foreign exchange market.
Activity 12.6
Review Chapter 6 and Hill 2005, Chapter 9.
We now consider three topics concerned with managing foreign exchange risk. They are foreign exchange exposure, ways of reducing exposure and developing policies for managing exposure.
The key word here is exposure , so let's define its three forms and at the same time say how to avoid each exposure risk.
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