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Glossary

Cash Flow At Risk (Cfar)

Cash Flow at Risk (CFaR), in the context of foreign exchange, is a measure of the extent to which future cash flows and operating profit margins may fall short of expectations as a result of currency fluctuations. CFaR calculations take into account the volatility of the currency pairs in the exposure and their correlation, in order to measure the cash-flow and/or operating margin impact of an adverse change in currency rates.