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Corporate FX hedging: An introduction for the corporate treasury

Author

Listed:
  • Heidorn, Thomas
  • Pavicic, Tim
  • Sieber, Antje

Abstract

FX rates are increasingly volatile in recent macroeconomic and geopolitical times of uncertainty. FX risk if not dealt with properly can pose existential threads to companies. Especially fast-growing companies, that have previously not hedged FX risks due to insignificance, need to build up a proper FX risk management. This working paper delivers a comprehensive guide on FX hedging for small and medium enterprises. It should help a treasurer to setup and/or improve their FX hedging approach. The goal of this paper is to provide a treasurer with the necessary tools and knowledge to manage and hedge his company's FX exposure. The paper provides insights on the practical implementation, regulatory framework, and accounting perspective of an FX risk management.

Suggested Citation

  • Heidorn, Thomas & Pavicic, Tim & Sieber, Antje, 2022. "Corporate FX hedging: An introduction for the corporate treasury," Frankfurt School - Working Paper Series 233, Frankfurt School of Finance and Management.
    • Handle: RePEc:zbw:fsfmwp:233
    as

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    References listed on IDEAS

    as
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    2. Michael G. Papaioannou, 2006. "Exchange Rate Risk Measurement and Management: Issues and Approaches for Firms," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 4(2), pages 129-146.
    3. Pawel Fiedor & Artur Holda, 2016. "Information-theoretic approach to quantifying currency risk," Journal of Risk Finance, Emerald Group Publishing, vol. 17(1), pages 93-109, January.
    4. Paweł Fiedor & Artur Hołda, 2016. "Information-theoretic approach to quantifying currency risk," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 17(1), pages 93-109, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Corporate Treasury; Risk management; Corporate hedging; FX hedging; Foreign currency risk;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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