Ford Motor Company manufactures and sells motor vehicles worldwide. Through their worldwide operations they are exposed to all types of foreign currency risk. Their website is www.ford.com. Go to this website and access their 2003 annual report. Scroll through the report until you find the section “Quantitative and Qualitative Disclosures about Market Risk” on page 62. In the subsections titled “Automotive Market and Counterparty Risk” and “Foreign Currency Risk” is a discussion of how Ford uses earning at risk (EAR) analysis in evaluating foreign currency exposure for hedging. Note from the discussion that Ford hedges economic and transaction exposure but not translation exposure. This is consistent with the discussion in the chapter mentioning that the translation process does not have a direct effect on reporting currency cash flows, and will only have a realizable effect on net investment upon the sale or liquidation of exposed assets.