ABSTRACT
BECAUSE multinational corporations (MNCs) arc deeply involved in international business, they are especially vulnerable to foreign-exchange-rate volatility. The average MNC exports and imports; has outstanding short-and long-term foreign-currency loans, assets, and liabilities; and operates numerous subsidiaries and affiliates abroad. Since the adoption of the floating exchange-rate system in the early 1970s, this sensitivity to currency-rate volatility has increased, and preoccupation with foreign-exchange exposure management has proliferated.
