The How Of Dow: Managing Currency Risk

Millman, Gregory J.
November 1998
Financial Executive;Nov98, Vol. 14 Issue 6, p19
Academic Journal
The article refers to the impact of financial crises in Russia and Asia on American corporations and focuses on the financial risk management system used at Dow Chemical Co. Dow's chief financial officer Pedro Reinhard comments on a study of currency shifts, price elasticity of demand, and competitive positioning which lead to the development of a risk management program that protects the company's cash flow. The risk management system measures global currency, interest rate, and commodity exposures in terms of historical market behavior and a value at risk model. The finance department's investment strategy for currencies and interest rates is hedging and trading for profit. Local managers contribute information related to credit and currency risk. INSET: Reversal of Fortunes..


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