Abstract: Most International Finance textbooks will explain how Large Multi National Corporations can hedge against currency fluctuations using internal and external techniques without asking the basic question do they need to. Some textbooks reference a standard loss in reported profits due to currency fluctuations without explaining what the term reported profits means or considering the impact or lack of impact on the Organization. This paper discusses whether these “paper” reported profits are relevant and whether there is really a need for Global Organizations to hedge.
Keywords: International Finance, Currency hedging, Internal and external currency hedging, Reported profits, exchange risk.
Title: Why Global Multi National Corporations Do Not Need To Use Derivatives to Hedge against Currency Fluctuations ?
Author: Dr. J A Simcox
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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