Risk Management Questions – College Pal

A – What does interest rate risk mean? Why should large retailers understand
this? How could/would a large global retailer manage interest rate risk?
Explain in detail.

B – What is meant by foreign exchange risk? Why might a manufacturer for a
retail store decide to use a supplier who’s products are priced in the same
currency? What are some of the foreign exchange rate hedging strategies
that you might use to minimize risk in the foreign exchange markets for
your retail organization? Explain in detail.