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Foreign exchange risk management

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Foreign exchange risk management

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by AvatarJohn Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • December 25, 2018 at 12:29 pm #492691
    Avatarmaxpopper
    Member
    • Topics: 177
    • Replies: 132
    • ☆☆☆

    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?

    December 26, 2018 at 9:41 am #493481
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    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.

    December 26, 2018 at 1:02 pm #495602
    Avatarmaxpopper
    Member
    • Topics: 177
    • Replies: 132
    • ☆☆☆

    B) Sorry I mean that forward exchange contract, future contracts and currency options can be applied for receipts as well as payments, correct?

    December 27, 2018 at 10:26 am #499026
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    Yes. Please do watch the lectures!

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