Does foreign currency exchange hedging both reduce risk and increase expected value? Explain and list several arguments in favor of currency risk management and several against.
select a U.S. multinational company, and respond to the following questions: In terms of currency denomination, describe how the firm prices its revenues and costs. For multinational enterprises (MNEs) with multiple foreign operations, consider any 2 of those operations and the contribution they are making to the parent firm’s profits. What means do they use to hedge against exchange rate risk? Using this information, what do you think would be the effect of increases or decreases in the dollar’s exchange value on the firm’s profitability?