Resource title

Exposures and exposure hedging in exchange rate risk management

Resource image

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Resource description

Corporations are affected by increasing volatilities on foreign exchange markets. A response to this development was the creation of financial instruments, so called derivatives, in order to protect corporations from the effects of flexible exchange rates. To understand the included risks and to take correct decisions it is necessary to get a fundamental insight into exchange rate risk management. First it is the aim of this paper to systemize the possibilities of determining exchange rate risk as well as objectives of exchange rate risk management. In the second part of the paper a model to determine the optimal hedge ratio in the case of hedging transaction risks with forwards is described.

Resource author

Klaus Schäfer, Johannes Pohn-Weidinger

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/27093

Resource license

Adapt according to the presented license agreement and reference the original author.