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In today's video, the focus is on why companies hedge and the rationale behind it. This is part of a series on financial derivatives. The discussion begins with a question posed to students about an American manufacturing company that operates entirely in U.S. dollars—buying supplies, selling products, and paying staff—all in dollars. The instructor notes that student responses are often divided on whether this company has any foreign exchange risk, indicating a common misconception. The video aims to clarify these points and explore the purposes of hedging in corporate finance.