Monday, November 11, 2013

Hedging Risk

You would think that with the volatility in currencies, commodity prices, and interest rates that most companies would hedge these risks. A recent survey found that only about one-half of companies with these risks hedge them. Only 76 percent of the companies in the survey reported exchange rate risk, but only 52 percent hedge this risk. Only 43 percent of companies reported hedging commodity risk, and 41 percent hedged interest rate risk.