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International Risk Management: an Analysis of 3m's Foreign Risk Management

In: Business and Management

Submitted By jerometje700
Words 5228
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08
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08
Fall

ABSTRACT This paper is written with a purpose to give a strategic advice to 3M’s current CFO D.W. Meline how to manage 3M’s future exposure of the foreign exchange rate risk. In doing so, the overall profile of the company is discussed; the current foreign exchange risk management instruments are described; and conclusions are drawn, followed by recommendations.
ABSTRACT This paper is written with a purpose to give a strategic advice to 3M’s current CFO D.W. Meline how to manage 3M’s future exposure of the foreign exchange rate risk. In doing so, the overall profile of the company is discussed; the current foreign exchange risk management instruments are described; and conclusions are drawn, followed by recommendations.
International Risk Management:
An Analysis of 3M’s Foreign Risk Management

International Risk Management:
An Analysis of 3M’s Foreign Risk Management

Contents

Executive Summary 3 Introduction 4 1. Description Historical Exchange Rates 6 2. Foreign Currency Exchange Rate Risk 10 2.1. Current Strategy to Manage Exchange Rate Risk 10 2.1.1. Cash Flow Hedging 10 2.1.2. Net investment hedging 13 2.2. Currency Translation Effects on Business Segments 14 3. Appreciating and Depreciation of Domestic Currency and Foreign Exchange Rate Risk Management 15 3.1. 3M’s Domestic and International Transactions 15 3.2. Appreciation of the Domestic Currency 17 3.3. Depreciation of the Domestic Currency 17 4. Implications of 3M’s Derivatives 18 4.1. Forward and Futures Contracts 18 4.2. Options 19 4.3....

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