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Managing Foreign Exchange Risks

Brownlee, E. Richa...

Technical Note

Managing Foreign Exchange Risks

Brownlee, E. Richard II; Conroy, Robert M.; Grayson, Leslie E.; Reed, William P.; Wilson, Brendt

F-0601 | Published March 28, 1991 | 22 pages. Technical Note

Collection: Darden School of Business

Product Details

This technical note discusses the three types of foreign exchange risk: transaction exposure, translation exposure, and economic exposure. It addresses the nature of those risks and presents some methods that companies might use to manage them. Included in this note are discussions of the financial accounting and reporting requirements of FAS No. 52 (Foreign Currency Translation), of foreign exchange markets, of hedging strategies, and of such activities as loan swaps and licensing agreements.

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