Hedging and Managing Exchange Rate and Related Macroeconomic Exposure

Lars Oxelheim and Clas Wihlborg

No 177, Working Paper Series from Research Institute of Industrial Economics

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.

Keywords: Hedging; macroeconomic schocks firm strategy; financial instruments (search for similar items in EconPapers)
JEL-codes: G10 G32 (search for similar items in EconPapers)
Pages: 46 pages
Date: 1987-08
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