Identify possible internal and external foreign exchange risk management (hedging) ...

Question

Identify      possible internal and external foreign exchange risk management (hedging)      strategies that VCL can use to mitigate the FX risk exposure they faced.      You need to briefly explain the possible advantages and disadvantages of      each strategy you have identified

Shubham · Accepted Answer

INTERNATIONAL BUSINESS
Table of Contents
Internal Methods:	3
Invoice in Home Currency:	3
Advantage:	3
Disadvantage:	3
Risk Sharing:	3
Advantage:	3
Disadvantage:	3
External Methods:	3
Forwards:	3
Advantage:	3
Disadvantage:	3
Money Market:	3
Advantage:	4
Disadvantage:	4
References	5
Internal and external foreign exchange risk management strategies to mitigate the FX risk exposure
Internal Methods: 
These are adopted by the company itself
Invoice in Home Currency: 
All the FX risk can be transferred to the customer in Euro.
Advantage:
Whole risk can be transferred to the customer.
Disadvantage:
It can result into loss of sales,

Identify possible internal and external foreign exchange risk management (hedging) strategies that VCL can use to mitigate the FX risk exposure they faced. You need to briefly explain the possible...

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