How do you calculate net exposure?

Date:2023-02-17
Net exposure is calculated by subtracting the total value of a company’s hedging activities from the total of its total exposure to risk. If a company has a long position in a certain asset, the value of its net exposure is the difference between the value of the asset and the value of the hedging activities. The net exposure reflects the company’s true risk level of the asset, taking into account the effects of hedging.
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