BLOCK II: FEATURES FOREIGN EXCHANGE

BLOCK II: FEATURES FOREIGN EXCHANGE-

UNIT 5 Forward exchange contracts: Types – Forward exchange rate computation – Factors affecting forward rates.

UNIT 6 Extension and cancellation of forward contracts – option contracts: Types and mechanism.

UNIT 7 Foreign exchange risk management: Transaction exposure risk: Internal Strategies – Risk shifting, Risk sharing-Exposure netting and offsetting.

UNIT 8 External Strategies: Foreign currencyoptions – Forward and money market hedge – Currency Swaps – Interest Rate Swaps.