relatively understudied. We study firms' currency risk exposure and their hedging choices by employing a unique dataset covering …, international trade, trade credits and foreign currency debt. We uncover four novel facts: (i) natural hedging of currency risk is … limited, (ii) financial hedging is more likely to be used by larger firms and for larger amounts, (iii) firms in international …

Conventional wisdom holds that conservative investors should avoid exposure to foreign currency risk. Even if they hold … risk can be hedged by holding foreign currency if the domestic currency tends to depreciate when the domestic real interest … rate falls, as implied by the theory of uncovered interest parity. Empirically this effect is important and can lead …

in foreign currency. So the firm's hedging strategy is simple: sell foreign currency futures equal to the value of its … and its marginal cost in order to assess its exposure to exchange rates. So its hedging strategy also requires detailed …

incomplete forex risk trading. Incomplete hedging of forex risk, documented for U.S. global mutual funds, has three important …

a sticky-price alternative to Lucas's (1982) exchage rate risk premium model. We show that the level risk premium' in …

well documented facts, the failure of log-linear empirical exchange rate models of the 1970's and the variability of risk …, can have a significant effect on risk premiums in the foreign exchange market and can induce conditional volatility of …

risk management measures--financial and operational hedging, the choice of invoice currency and the price revision strategy …This paper investigates the relationship between the Japanese firms' exposure to the exchange rate risk and risk … risk is estimated by co-movements of the stock prices and exchange rates, following Dominguez (1998) and others. Data on …

This paper discusses the link between portfolio diversification models of exchange risk and the macroeconomics of … process. The concept of exchange risk is discussed in terms of the variability of the real exchange rate. The paper shows that … variability, full hedging is possible. Even for the case of no real exchange rate variability, it is shown, variability of the …

the real exchange rate - have apparently contradictory implications for the relationship of the foreign exchange risk …

none of our estimates require a systematic association between currency risk premia and predictable movements in exchange …