Why does merck hedge its currency risk how does merck, Financial Management

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Why does merck hedge its currency risk how does merck

The following questions relate to the supplementary reading mentioned in class (Levant and Kearney, 1990. “Identifying, measuring, and hedging currency risk at Merck”). A copy of this article has been uploaded to the supplementary reading folder in Canvas.

Please provide brief (1-2 sentence) answers to the following questions.

(i) Why does Merck hedge its currency risk?

(ii) How does Merck obtain its exchange rate forecasts?

(iii) What instruments does Merck use to hedge, and how does it decide?

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