Some companies refrain from using financial derivatives to manage their foreign exchange exposures. They consider derivatives such as forwards, futures and options as speculative. They also believe the long-term effect is the same regardless of whether a firm hedges since hedging results in gains sometimes and losses other times.

• Do you agree with these companies? Why or why not?
• If you are faced with currency exposures in your business, will you hedge? If so, how will you hedge?