The Nature and Management of Foreign Exchange Risk

15 Pages Posted: 9 Apr 2012

See all articles by Niso Abuaf

Niso Abuaf

Pace University - Lubin School of Business; Samuel Ramirez and Co.; Samuel A. Ramirez and Co.

Date Written: 1986

Abstract

Since the 1970s, exchange rate volatility has increased markedly and, with it, the levels of foreign exchange risk. In fact, fluctuations in financial variables such as exchange rates and interest rates have produced capital gains and losses so large as to swamp many companies’ operating results. In response, many financial managers have turned to hedging as well as to more active risk management strategies in the foreign exchange markets. In this article, I review the theoretical and practical issues involved, while citing actual market experience in 1973-1984. With this as background, I then go on to discuss forecasting techniques and risk management strategies.

Suggested Citation

Abuaf, Niso, The Nature and Management of Foreign Exchange Risk (1986). Midland Corporate Finance Journal, p. 30, 1986. Available at SSRN: https://ssrn.com/abstract=2037522

Niso Abuaf (Contact Author)

Pace University - Lubin School of Business ( email )

1 Pace Plaza
New York, NY 10038-1502
United States

Samuel Ramirez and Co. ( email )

61 Broadway
New York, NY 10006
United States

Samuel A. Ramirez and Co. ( email )

61 Broadway
New York, NY 10006

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