Robert A. Korajczyk has written:

'Equity risk premia and the pricing of foreign exchange risk' -- subject(s): Risk, Foreign exchange

businesses that sell goods or services to customers overseas, and are paid in a foreign currency, are exposed to foreign exchange risk. To manage that exposure effectively, they must understand the inner workings of foreign exchange risk.

The primary reason companies would hedge foreign exchange risk is so that they do not lose money on capital or assets they have stored in different currencies.

Asko Torniainen has written:

'Foreign exchange risk on competitive exposure and strategic hedging' -- subject(s): Hedging (Finance), Risk, Foreign exchange market

Foreign Exchange Rate Risk