Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/27093 
Year of Publication: 
2005
Series/Report no.: 
Freiberger Arbeitspapiere No. 2005/19
Publisher: 
Technische Universität Bergakademie Freiberg, Fakultät für Wirtschaftswissenschaften, Freiberg
Abstract: 
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.
Subjects: 
Currency Risk
Transaction Risk
Currency Forwards
Optimal Hedging
JEL: 
F31
G15
G39
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.