Revise the paper according to the professor's opinion.

Existing companies in the modern day business are working upon various risks associated with doing business. The factors such as global currency changes as well as the internal workings of the suppliers and the production together with the customers affect the overall working in the organization. The businesses tend to change from time to time to react to real-time issues and adjust to the necessary environment.

Issues of currency values, as well as fall and the rise in the same, are just some of the challenges that beckon the risks handled by the organization. Arguably, the most visible risks of exposure to the transaction as well as the ones related to financial instruments are the one taking the time of the companies (Lam, 2014). The company, in this case, is more concerned of the currency futures as well as swaps and the options, the mismatches relating to costs and investments are also major issues and is complemented with the revenues.

As the organization makes investment decisions, it will have to be much concerned with the external and internal factors affecting the organization. Such issues include the risks identified across the organization. It is through the risk management that the company are able to handle the impact as the one emanating from the rate of currency and its changes across the organization (Aven, 2010). The main issues on the risk management are understanding the kind of the risk to handle and the instrument that must be checked to ensure that the risk is handled appropriately and efficiently.

In the first instrument, the organization will need not just to understand the rates in terms of currency but also on the fluctuations related to the currency. The use of mathematical risk management tools will be important in analyzing and measuring the risks associated with the organization. They will be important in assessing how the organization reacts to structural a well as portfolio risks as the related transaction risks across different segments. This analysis will be important in understanding the influence value and the prices as per the projected risks.

The management of the above-mentioned risks will be important in managing and reducing the effects of volatility associated with the currency. It will be necessary for helping grows the appropriate diversification of the investment portfolio of the company. The fluctuation will help offset the price changes across the market thus making it simple to bring down the currency risks and all the associated effects in the real terms. It will be less important for any investor in the organization to require or need to facilitate any risk premium as the lowering of the risks will reciprocate to the lowering of the cost of capital for the firm (Manuj and Mentzer, 2008).

With the financial instruments, it is possible to create the hedge between the sizes and the duration of the related risks as per the organization. the hedging of the risks such as the structural risks makes it much possible to react to the operations as well as strategic measures related to the organization while are the same time realizing the opportunities related to the handling of the risks.

The risks benefits identified in the organization are related to the financial instruments and will always affect the return in the organization. the extrinsic and intrinsic factor related to the risks affects the overall value and prices both internally and externally making it important to have the necessary skills in managing the risks. Failure to manage the risks might later work against the wellness of the organization.

References

Aven, T. (2010). Risk management. In Risk Management and Governance (pp. 121-158). Springer Berlin Heidelberg.

Demirgüç-Kunt, A., & Huizinga, H. (2010). Bank activity and funding strategies: The impact on risk and returns. Journal of Financial Economics, 98(3), 626-650.

Manuj, I., & Mentzer, J. T. (2008). Global supply chain risk management. Journal of business logistics, 29(1), 133-155.

Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.