General Remarks on the Assessment of Foreign Exchange Risk Exposure of Firms

12 Pages Posted: 14 Apr 2008

See all articles by Arnaldo Mauri

Arnaldo Mauri

Università Degli Studi di Milano

Claudia Gabriela Baicu

Universitatea Spiru Haret

Date Written: 01-02-2008

Abstract

The paper deals firstly with the assessment of nonfinancial firm's risk exposure which has been deeply affected in the last two decades by the trend of market globalization and increased competition. In this new scenario we can note the weakening of the traditional separation between risks voluntary accepted by the firm as a chance to improve its profitability and risks which unavoidably lay on the overall business activity of the firm itself and have to be adequately covered by means of risk management. Secondly, within the frame of financial risks, particular attention is given to exchange rate fluctuations and to issues dealing with measurement and analysis of qualitative as well as quantitative aspects of foreign exchange risks affecting nonfinancial firms and chiefly those extensively involved in international activities. The focus then shifts to the assessment of foreign currency risk exposure by the firm as well as to managing foreign exchange risks and to the instruments and techniques involved.

Keywords: risk exposure, financial risk, foreign exchange risk, risk management

JEL Classification: G30, G28, G32

Suggested Citation

Mauri, Arnaldo and Baicu, Claudia Gabriela, General Remarks on the Assessment of Foreign Exchange Risk Exposure of Firms (01-02-2008). Available at SSRN: https://ssrn.com/abstract=1118729

Arnaldo Mauri (Contact Author)

Università Degli Studi di Milano ( email )

Milan, 20122
Italy

Claudia Gabriela Baicu

Universitatea Spiru Haret ( email )

Ion Ghica Street nr 13 sector 3
Sector 6
Bucharest, 030045
Romania

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
614
Abstract Views
3,446
rank
46,740
PlumX Metrics