Columbus Business Daily

How IBM company uses foreign exchange markets and instruments, utilizes the international finance and investme

How IBM company uses foreign exchange markets and instruments, utilizes the international finance and investment markets, the impact of foreign exchange rates on the company’s earnings, and the financial management strategies of the company in a certain period of time. I just need some little head way where to look or get some infomation. Thank for your help.

Public Comments

1. They hedge their investments. For example, if they sell $10,000,000 Mexican Pesos in Mexico ($1,000,000.00 USD) and the currency is down to $20.00 Mexican Pesos per USD then they only have $500,000.00 USD and they lose 50% of the money in one day. To avoid this they sell their Mexican Pesos in advance to somebody else willing to take the risk for $990,000.00 USD It's a little less money but they are now protected. Now apply the same example to over 100 countries. 1% here and 10% there and you start losing billions. The opposite is also true. However, most corporations don't make bets with their earnings. They prefer to keep the risks to a minimum.