Can somone help me with the bolded text? Thank YOU!!
" The company’s income is closely linked to the price of oil. the appreciation of the home country’s currency relative to the U.S. dollar would reduce the company’s sales in terms of the home currency."
“The decision not to hedge this risk was correct. The company should remain exposed to market risk associated with exchange rate movements (i.e., currency risk). Hedging would remove currency risk but leave the company with market risk associated with oil price movements . If the home currency declined, the price of oil would likely decline because it is positively correlated with the U.S. dollar value of the home currency. That would be a negative for income. On the other hand, appreciation of the home currency is likely to be accompanied by an oil price increase, which would be positive for income.”