Currency Hedging: The Risks and Benefits Aren’t Limited to Financial Issues

Answering the question “to hedge or not to hedge?” currency exposure is more than a straightforward mathematical effort. While the aim of currency hedging is to manage risk, the ability to achieve the goal needs ongoing consideration. Companies need to look at several factors, from transaction costs to global funding flows and the timing of revenue collections. And increasingly, there is another big factor that companies must weigh: Some analysts can have a knee-jerk, negative reaction to complexity in general, and hedging strikes them as being too complex. To delve into this issue, Knowledge at Wharton interviewed experts from Wharton and PwC for this white paper.