markets have grown more volatile since exchange were freed in 1973. rates and exchange rates now fluctuate more than at any time since the Crash of 1929. At the same time, companies' profit have been squeezed by the lowering of barriers and increased competition. The result is that companies worldwide have been forced to come to terms with their financial . No longer can managers stick their heads in the sand and pretend that because their firms make cars, or sell soap , they need only worry about this year's convertible or whether their new formula washes whiter than Brand X. As many have found to their cost, ignoring interest-rate, currency or commodity risks can hurt a company just as badly as the failure of a product.

From: Managing Derivative Risks by Lillian Chew