Question

Explain how mitigates the Apple risks in international currency.

Answer 1

Foreign exchange risk management includes defining, evaluating, and prioritizing different foreign currency exposures, and designing and executing a structured and comprehensive strategy that efficiently and effectively uses company resources to minimize and maximize FX danger. The degree to which businesses adopt effective foreign exchange risk management policies can differ considerably, from not managing the risk at all to participating in comprehensive hedging activities, and as a result, the effect on the bottom line can vary widely across organizations.

Diversification of the manufacturing facilities and target markets:
Financing diversification: getting exposure to capital markets in many major nations allows a business the ability to collect money on the market at the lowest funds available.
Matching currency flows: This is a basic idea, involving matching foreign currency inflows and outflows. For instance, if a U.S. firm has large euro inflows and is trying to raise debt, it should consider investing in euros.
Currency risk-sharing agreements: This is a contractual arrangement in which the two parties to a selling or purchasing deal agree to share the risk resulting from fluctuations in the exchange rate.