This technical note describes the three types of currency risk: transaction exposure and translation exposure economic engagement. It deals with the nature of these risks and provides some methods that companies use to they could manage. Included in this note are discussions about the accounting and reporting requirements of FAS No. 52 (Foreign Currency Translation), the foreign exchange markets of hedging strategies and activities, such as credit swaps and license agreements.

This technical note describes the three types of currency risk: transaction exposure and translation exposure economic engagement. It deals with the nature of these risks and provides some methods that companies use to they could manage. Included in this note are discussions on the financial accounting and reporting requirements of FAS No. 52 (Foreign Currency Translation), the foreign exchange markets of hedging strategies and activities, such as credit swaps and license agreements.
This is a Darden case study.
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from
E. Richard Brownlee II,
Brendt Wilson,
Leslie Grayson,
Robert M. Conroy
Source: Darden School of Business
21 pages.
Release date: 01 June, 1990. Prod #: UV0447-PDF-ENG
Currency risks HBR case solution