ACC 401 Week 9 Assignment 2: Foreign Currency Risk
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ACC 401 Week 9 Assignment 2 Foreign Currency Risk
Albert, CEO of XYZ, Inc., desires to expand the company’s sales through exports to three (3) foreign
subsidiaries. Albert knows that the target subsidiaries are located in countries that require
transactions to be denominated in the local currencies. Albert has researched foreign currency risk
and knows that there is accounting exposure in accounting statements, operating exposure in future
cash flows, and transaction exposure in outstanding obligations. Albert does not understand how
these risks apply to XYZ, Inc. under his proposal or if there are any mitigating risk strategies available.
Albert requests you, the head of the Risk Management division, to prepare a report that he can
present to the Board of Directors on the potential foreign currency ri