It may appear that companies in which individual investors place money do not have exposures to financial prices. After reading this article, the reader should have some notion of how dangerous a misconception that can be.
The single most important point to take away from this material is that financial risk management is critical to the survival of any non-financial corporation. Investors who have real money at risk must understand the exposures facing the firms in which they invest, they must know the extent of risk management at these companies and they must be able to distinguish between good risk management programs and bad ones. Without this knowledge, they may be in for some ugly surprises.
The single most important point to take away from this material is that financial risk management is critical to the survival of any non-financial corporation. Investors who have real money at risk must understand the exposures facing the firms in which they invest, they must know the extent of risk management at these companies and they must be able to distinguish between good risk management programs and bad ones. Without this knowledge, they may be in for some ugly surprises.
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