We consider a monopolistic, risk-averse multinational firm which sells and produces at home and abroad under exchange rate uncertainty. First we show that the stochastic exchange rate implies higher production and lower sales in the foreign country. Then we analyze the impact of currency futures...

We focus on the issue of currency management in the context of offshore investing with an emphasis on the selection of an appropriate currency hedge. It is shown that when seeking to minimize the risk associated with the Rand value of a foreign asset, the optimal currency hedge is strongly...

Foreign Exchange Markets and Foreign Exchange Rates -- Exchange Rate Regimes and International Monetary Systems -- International Parity Conditions -- Balance of Payments and International Investment Positions -- Open Economy Macroeconomics -- Balance of Payments Issues and Exchange Rate...