Managing Foreign Exchange Risk Strategies for Global Portfolios

The past decade has witnessed the rapid introduction and the widespread use of the new and complex financial instruments and hedging strategies by banking, investment and treasury and finance professionals around the world to control and minimize the foreign exchange risks associated with their institutional securities. This book provides an analysis of some of these developments. Part 1 contains introductory material about foreign exchange and its peculiar risks as well as descriptions and historical analyses of the major currencies. Part 2 is more analytical and covers the Interest Parity Theorem, the linkages between the currency and debt markets, the valuation of currency forward and futures markets and currency option pricing. The final section focuses on practical applications, with coverage of various hedging techniques. 4