Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter34: International Finance
Section: Chapter Questions
Problem 13QP
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Question
What Is Managing Currency Risks?
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Step 1
Managing risks associated with currency are the ways/ strategies which help a person or firm to save their cash flows, assets/liabilities from the effects of adverse fluctuations of the exchange rate(ER). The risk if managed in a proper manner will further ensure easy availability of the internal funds (which can be used for investment purpose) and the dependence on external funds (which are risky and hence less preferred) will decrease.
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