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How does the company Apple manage its exposure to foreign currencies?

How does the company Apple manage its exposure to foreign currencies?

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Answer #1

Apple uses Hedging strategies in currency to reduce its foreign currency exposures. It holds currency hedging contracts from which has a carrying value of 132 million in June 2014 quarter and increased to 3.5 billion by Dec 2014 quarter which is intended to reduce the negative impact of increasing dollar value on its profits. Due to such hedging Apple saved more than 600 million in 2015.

Apple use forward contracts which locks in a fixed exchange rate as well as swap agreement with the institutions to hedge its risk exposure of currencies. They also purchase currency futures which are cash settled which are traded on exchanges.

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