To what risk is the company exposing itself

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1. In order to eliminate all risk on its exports to Japan, a company decides to hedge both its actual and anticipated sales there. To what risk is the company exposing itself? How could this risk be managed?

2. Instead of its previous policy of always hedging its foreign currency receivables, Sun Microsystems has decided to hedge only when it believes the dollar will strengthen. Otherwise, it will go uncovered. Comment on this new policy.

Reference no: EM131278805

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