Question: 1) Explain how hedging may create value for a firm. How would a treasure determine whether or not to hedge, as well as the correct

1) Explain how hedging may create value for a firm. How would a treasure determine whether or not to hedge, as well as the correct strategy to hedge FX risks

2) Explain how expected changes in FX rates affects a decision to invest or borrow abroad. Should the cash management function be centralized? Explain the advantages and disadvantages of having a centralized cash management system.

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1 Hedging can create value for a firm in several ways Firstly it helps in reducing the potential financial risks associated with fluctuations in foreign exchange FX rates By hedging a firm can protect ... View full answer

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1) Explain how hedging may create value for a firm. How would a treasure determine whether or not to hedge, as well as the correct strategy to hedge FX risks 2) Explain how expected changes in FX...

Explain how hedging may create value for a firm. How would a treasure determine whether or not to hedge, as well as the correct strategy to hedge FX risks?

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