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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Foreign exchange risk management
Sir
a) FRA, IRG, interest rate futures and interest rate options can be applied when company is borrowing as well as depositing rather than just borrowing. Correct?
b) Similarly, forward exchange contract, future contracts and currency options can be applied when company is borrowing as well as depositing rather than just borrowing. Correct?
a) Correct – as I explaining my lectures.
b) Foreign exchange methods are for hedging exchange rate risk and are nothing to do with borrowing or depositing.
B) Sorry I mean that forward exchange contract, future contracts and currency options can be applied for receipts as well as payments, correct?
Yes. Please do watch the lectures!
