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FOREIGN EXCHANGE EXPOSURE

Discuss FOREIGN EXCHANGE EXPOSURE within the Financial Management ( FM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; FOREIGN EXCHANGE EXPOSURE Foreign exchange risk is related to the variability of the domestic currency values of assets, liabilities or ...

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FOREIGN EXCHANGE EXPOSURE
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Sunanda K. Chavan
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FOREIGN EXCHANGE EXPOSURE - October 8th, 2010

FOREIGN EXCHANGE EXPOSURE




Foreign exchange risk is related to the variability of the domestic currency values of assets, liabilities or operating income due to unanticipated changes in exchange rates, whereas foreign exchange exposure is what is at risk.

Foreign currency exposures and the attendant risk arise whenever a business has an income or expenditure or an asset or liability in a currency other than that of the balance-sheet currency.

Indeed exposures can arise even for companies with no income, expenditure, asset or liability in a currency different from the balance-sheet currency.

When there is a condition prevalent where the exchange rates become extremely volatile the exchange rate movements destabilize the cash flows of a business significantly.

Such destabilization of cash flows that affects the profitability of the business is the risk from foreign currency exposures
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Rose Marry
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Re: FOREIGN EXCHANGE EXPOSURE - April 15th, 2016

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Originally Posted by sunandaC View Post
FOREIGN EXCHANGE EXPOSURE




Foreign exchange risk is related to the variability of the domestic currency values of assets, liabilities or operating income due to unanticipated changes in exchange rates, whereas foreign exchange exposure is what is at risk.

Foreign currency exposures and the attendant risk arise whenever a business has an income or expenditure or an asset or liability in a currency other than that of the balance-sheet currency.

Indeed exposures can arise even for companies with no income, expenditure, asset or liability in a currency different from the balance-sheet currency.

When there is a condition prevalent where the exchange rates become extremely volatile the exchange rate movements destabilize the cash flows of a business significantly.

Such destabilization of cash flows that affects the profitability of the business is the risk from foreign currency exposures
Hi buddy,

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