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How does enterprise's risk preference affect the choice of foreign exchange risk management strategy?
1. Risk avoidance means to completely eliminate risks by cutting off the relationship between the subject and the risk source, that is, giving up risk events or completely refusing to take risks. Obviously, this is not a positive approach, and the investment of enterprises will always face various risks. The use of avoidance usually has certain preconditions.

2. For those risks that cannot be avoided or transferred, it is best to reduce the possibility of occurrence or reduce the losses caused by risks through various means, that is, to implement risk control. Risk control can be divided into "ex ante control" and "ex post control". The so-called ex ante control is to take preventive measures in advance and control risks as much as possible on the basis of risk identification and estimation. And after-the-fact control refers to taking corresponding remedial measures after the loss occurs to reduce the loss to a minimum.

3. Risk isolation means that through the reasonable arrangement of resources, the occurrence of a risk event will not make all the resources of the subject suffer losses. Risk isolation includes two technologies: phased and repeated. The basic idea of staging technology is to adopt portfolio, that is, put all the eggs in different baskets, which is to isolate risks in space. Repetitive technology, also known as redundancy technology, is to divide resources into active and standby. When the current resources are abnormal, the standby resources can play a role immediately and let the original work continue, which is to isolate risks in time.

4. Different from decentralized technology, risk combination is to "concentrate" risks. But the result of "concentration" is not to amplify the risk, but to resolve the risk through hedging effect. For example, the "re-invoicing center" set up by some multinational companies is a typical example of the risk combination method. In this way, the foreign currency accounts payable and accounts receivable of subsidiaries are centrally managed, and the hedging effect of accounts receivable and accounts payable of subsidiaries is utilized to minimize foreign exchange risks.

5. Risk transfer is to transfer the risk to other subjects without bearing it. The most typical risk transfer technology is insurance. After the insurance company buys insurance, once the enterprise suffers such losses, the insurance company will give corresponding compensation according to the insured amount. In this way, the enterprise can completely or partially transfer the risk to the insurance company, and may not bear this kind of loss or not at all, but it needs a certain insurance fee to buy insurance.