rate in question. The study investigates the implications of hedging exchange rate risk of less common currencies for an …In a framework for risk management a model of an international firm under exchange rate uncertainty is discussed. The … firm can cross-hedge the exchange rate risk by using forwards of other country's currencies correlated to the spot exchange …

The optimum behavior of a competitive risk-averse international trader who supplies or demands commodities invoiced in … foreign currency is examined when his profits are subject to several forms of risk: production, domestic cost, the exchange … and the double hedging theorems are derived. The behavior of the same firm with and without complete markets is compared …

The paper derives optimal cross hedging and production rules for an exporting firm which faces multiple exchange rate … risks. We study the impact of currency cross hedging upon the firm's export production for two countries. We demonstrate … that when the forward market for cross hedging is unbiased there is a full hedge. However, the profits remain stochastic …