Globalization refers to cross border activities as well as borderless transactions; the location of manufacturing facilities in more than one country; the sales of goods and services in several nations; and the acquisition of resources from many nations. These issues face nearly every manager at virtually every level in one way or another. To make effective decisions, managers must be aware of the various ways global issues impact their company. These effects can be felt through balance sheet exposure or through market exposure. While these exposures can be managed to a degree through various types of hedging vehicles, they still represent a source of uncertainty and risk. To begin, one must understand the nature of the foreign exchange market and how exchange rates are determined. Next, market tools like forward and future contracts, and options need to be considered as ways to manage this exposure. Finally, it is important to see that the global capital market is one of the most competitive markets in the world. Capital, to a large degree, is free today to seek its highest valued use. Yet governments still attempt to influence trade and capital flows.