The basic principles of financial management viz., raising of funds on most economical terms and their effective utilization; are same, both for domestic as well as international concerns. However, an international concern (MNC) faces higher degree of risk as compared to domestic concern because it operates in more than one country and its operations involve multiple foreign currencies. Hence, foreign exchange risk management is an additional aspect in case of International Financial Management, which occupies a major attention of finance manager of a MNC. Beside MNCs, foreign exchange risk management is also important in case of international trade (i.e. export-import).
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