Thank you, Dave, and good morning, everyone. A firm can stabilize its cash flows through using the instruments of financial derivatives. WN 2: Impact on profits due to Exchange rate movement: For purchase of materials, the entity has to make payment and hence the Banks selling rate will apply. Hence it can be concluded that translation risk is the related measurement of variability in the value of assets and liabilities in existence overseas. By purchasing currencyswapsor hedging throughfutures contracts, a company is able to lock in a rate of currency exchange for a set period of time and minimize translation risk. //
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