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Hedging and Managing Exchange Rate and Related Macroeconomic Exposure

Author

Listed:
  • Oxelheim, Lars

    (Research Institute of Industrial Economics (IFN))

  • Wihlborg, Clas G.

    (University of Southern California)

Abstract

Hedging transaction and translation exposures to exchange rate changes may increase the economic exposure of the firm and reduce the information value of firms' quarterly statements. In this paper hedging macroeconomic exposures, of which exchange rate exposure is one type, is discussed in terms of choice of macroeconomic variables for which exposures could be measured, choice of strategy for managing exposures, and choice of financial instruments for hedging different exposures.

Suggested Citation

  • Oxelheim, Lars & Wihlborg, Clas G., 1987. "Hedging and Managing Exchange Rate and Related Macroeconomic Exposure," Working Paper Series 177, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:0177
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    References listed on IDEAS

    as
    1. Hodder, James E., 1982. "Exposure to exchange-rate movements," Journal of International Economics, Elsevier, vol. 13(3-4), pages 375-386, November.
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    More about this item

    Keywords

    Hedging; macroeconomic schocks firm strategy; financial instruments;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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