One other function that accountants play inside the threat management approach requires quantifying trade-offs linked with option threat response tactics. Management may perhaps choose to help keep some threat exposures as an alternative to hedge whenever the charges of threat protection are deemed larger than the positive aspects. As an instance, an importer who features a firm acquire commitment denominated in foreign currency may perhaps choose not to hedge if he believes the foreign currency will weaken ahead of the shipping date. Accountants wouldappraise the positive aspects from hedging against its charges plus the chance charges of foregone gains from speculating in market place movements.
