Explain what exchange rate risk is and how it may affect international firms.

 
Discussion—Exchange Rate Risk
As a member of the finance team for an MNC, GBATT, you’ve been tasked by the CFO with monitoring the value of the currency used in foreign and domestic spending. The CFO asked you to provide some possible strategies to hedge against exchange rate risk.
Using the University online library resources, research strategies utilized to hedge against exchange rate risk. Then, based on your assigned readings and additional research, do the following:

Explain what exchange rate risk is and how it may affect international firms.
Identify three exchange rate hedging strategies and explain how GBATT could use them to help manage risks associated with exchange rates.
Provide some real-world examples of firms employing these strategies, citing sources to support your position.

By the due date assigned, post your responses to the appropriate Discussion Area. Through the end of the module, comment on at least two of your peers’ responses.
Write your initial response in 300–500 words. Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation

Do the following when responding to your peers:

Read your peers’ answers.
Provide substantive comments by

contributing new, relevant information from course readings, Web sites, or other sources;
building on the remarks or questions of others; or
sharing practical examples of key concepts from your professional or personal experiences

Respond to feedback on your posting and provide feedback to other students on their ideas.
Make sure your writing

is clear, concise, and organized;
demonstrates ethical scholarship in accurate representation and attribution of sources; and
displays accurate spelling, grammar, and punctuation.

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