Foreign Exchange Risk Management Policies

630 Words2 Pages
Andrew Marshall's paper Foreign exchange risk management in UK, USA, and Asia Pacific multinational companies has the a stated objective "to simultaneously survey the foreign exchange risk practices of large UK, USA and Asia Pacific multinational companies (MNCs). The author seeks to determine of foreign exchange rate risk management policies vary internationally. To study this subject, the author used a questionnaire of MNCs, choosing the largest 600 questionnaires from the UK, USA, Australia, Hong Kong, Japan, Singapore and South Korea. A total of 179 usable responses were received and this was the basis of the paper. The questionnaire covered a number of different subjects, including the importance of foreign exchange rate risk management, the objectives of managing foreign exchange rate risk, the degree of emphasis on transaction risk, the degree of emphasis on translation risk, the degree of emphasis on economic risk, and whether the respondent manages translation risk internally. The questionnaire also sought to understand some of the techniques that firms in the different regions used, for example pricing strategy, operating hedges, and planning. Where economic risk was not managed, the author sought to find out why the company had chosen not to manage this type of risk. The sample consisted of the top 200 MNCs in the UK, the top 200 MNCs in the US, and the top 200 MNCs in the Asia Pacific region. These consisted of 100 Japanese firms, and small numbers of firms
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