Any company engaged in international trade is vulnerable to the risks involved in the foreign exchange rate markets. Management understanding of these risks is crucial to the success of such a business. This training course clearly explains what the risks are and what methods can be used to minimise them. It is an invaluable guide through the pitfalls of international trade that can only become more useful with the continuing trend towards globalization.

Prerequisites

Global Objectives

• Explain how companies involved in international trade are subject to foreign exchange risk.
• Define a 'Spot Rate', distinguish between the bank's selling and buying rates, and calculate the value of one currency in terms of another.
• Explain the reason why decreasing a company's risk can increase the equity value.
• Explain the relevance of the Four-way Equivalence Theory.
• Explain some of the history behind the Euro and its effect on International Currency management.
• Distinguish between internal and external risk management methods.
• Define 'matching', 'invoicing', 'leading' and 'lagging', and 'netting'.
• Explain Forward Contracts and apply them as a method of risk management.
• Explain Currency Futures and apply them as a method of risk management.
• Define Market Cover and apply it as a method of external risk management.
• Define Factoring and Discounting and apply it as a method of external risk management.
• Explain how and when foreign currency accounts help to reduce foreign exchange risk.
• Define an Option and apply it to hedge against foreign exchange risk; distinguish between put and call options and name the determinants of an option premium.

Target Audience

Target Time