Hedging Foreign Exchange Risk Exposure by Importer Companies

Kazi Rashedul Hasan

doi:doi:10.11648/j.ijefm.20150305.14

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Hedging Foreign Exchange Risk Exposure by Importer Companies

Kazi Rashedul Hasan

Published in International Journal of Economics, Finance and Management Sciences (Volume 3, Issue 5)

Received: 20 August 2015 Accepted: 1 September 2015 Published: 11 September 2015

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Abstract

The study was conducted in order to disclose the Foreign Exchange (FX) rate risk faced by every importer company. The paper investigates FX risk hedging strategy using forwards versus floating strategy in terms of minimizing total importing costs. The study exposes real-life costs of hedging strategies using forwards comprising theoretical foundations as well as practical implementation example based on real company data. The main question to be answered in the paper is whether it is beneficial to hedge with FX forwards or it is better to float FX exposure.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 3, Issue 5)
DOI	10.11648/j.ijefm.20150305.14
Page(s)	435-440
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Probability Distribution, Pearson’s Chi-squared Test, Monte Carlo Simulation, Forward Contracts, Foreign Exchange

References

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Kazi Rashedul Hasan. (2015). Hedging Foreign Exchange Risk Exposure by Importer Companies. International Journal of Economics, Finance and Management Sciences, 3(5), 435-440. https://doi.org/10.11648/j.ijefm.20150305.14

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ACS Style

Kazi Rashedul Hasan. Hedging Foreign Exchange Risk Exposure by Importer Companies. Int. J. Econ. Finance Manag. Sci. 2015, 3(5), 435-440. doi: 10.11648/j.ijefm.20150305.14

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AMA Style

Kazi Rashedul Hasan. Hedging Foreign Exchange Risk Exposure by Importer Companies. Int J Econ Finance Manag Sci. 2015;3(5):435-440. doi: 10.11648/j.ijefm.20150305.14

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@article{10.11648/j.ijefm.20150305.14,
  author = {Kazi Rashedul Hasan},
  title = {Hedging Foreign Exchange Risk Exposure by Importer Companies},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {3},
  number = {5},
  pages = {435-440},
  doi = {10.11648/j.ijefm.20150305.14},
  url = {https://doi.org/10.11648/j.ijefm.20150305.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20150305.14},
  abstract = {The study was conducted in order to disclose the Foreign Exchange (FX) rate risk faced by every importer company. The paper investigates FX risk hedging strategy using forwards versus floating strategy in terms of minimizing total importing costs. The study exposes real-life costs of hedging strategies using forwards comprising theoretical foundations as well as practical implementation example based on real company data. The main question to be answered in the paper is whether it is beneficial to hedge with FX forwards or it is better to float FX exposure.},
 year = {2015}
}

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TY  - JOUR
T1  - Hedging Foreign Exchange Risk Exposure by Importer Companies
AU  - Kazi Rashedul Hasan
Y1  - 2015/09/11
PY  - 2015
N1  - https://doi.org/10.11648/j.ijefm.20150305.14
DO  - 10.11648/j.ijefm.20150305.14
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 435
EP  - 440
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20150305.14
AB  - The study was conducted in order to disclose the Foreign Exchange (FX) rate risk faced by every importer company. The paper investigates FX risk hedging strategy using forwards versus floating strategy in terms of minimizing total importing costs. The study exposes real-life costs of hedging strategies using forwards comprising theoretical foundations as well as practical implementation example based on real company data. The main question to be answered in the paper is whether it is beneficial to hedge with FX forwards or it is better to float FX exposure.
VL  - 3
IS  - 5
ER  -

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Author Information

Kazi Rashedul Hasan

Department of Finance, American International University-Bangladesh, Dhaka, Bangladesh

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APA Style

Kazi Rashedul Hasan. (2015). Hedging Foreign Exchange Risk Exposure by Importer Companies. International Journal of Economics, Finance and Management Sciences, 3(5), 435-440. https://doi.org/10.11648/j.ijefm.20150305.14

Copy | Download

ACS Style

Kazi Rashedul Hasan. Hedging Foreign Exchange Risk Exposure by Importer Companies. Int. J. Econ. Finance Manag. Sci. 2015, 3(5), 435-440. doi: 10.11648/j.ijefm.20150305.14

Copy | Download

AMA Style

Kazi Rashedul Hasan. Hedging Foreign Exchange Risk Exposure by Importer Companies. Int J Econ Finance Manag Sci. 2015;3(5):435-440. doi: 10.11648/j.ijefm.20150305.14

Copy | Download

@article{10.11648/j.ijefm.20150305.14,
  author = {Kazi Rashedul Hasan},
  title = {Hedging Foreign Exchange Risk Exposure by Importer Companies},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {3},
  number = {5},
  pages = {435-440},
  doi = {10.11648/j.ijefm.20150305.14},
  url = {https://doi.org/10.11648/j.ijefm.20150305.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20150305.14},
  abstract = {The study was conducted in order to disclose the Foreign Exchange (FX) rate risk faced by every importer company. The paper investigates FX risk hedging strategy using forwards versus floating strategy in terms of minimizing total importing costs. The study exposes real-life costs of hedging strategies using forwards comprising theoretical foundations as well as practical implementation example based on real company data. The main question to be answered in the paper is whether it is beneficial to hedge with FX forwards or it is better to float FX exposure.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - Hedging Foreign Exchange Risk Exposure by Importer Companies
AU  - Kazi Rashedul Hasan
Y1  - 2015/09/11
PY  - 2015
N1  - https://doi.org/10.11648/j.ijefm.20150305.14
DO  - 10.11648/j.ijefm.20150305.14
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 435
EP  - 440
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20150305.14
AB  - The study was conducted in order to disclose the Foreign Exchange (FX) rate risk faced by every importer company. The paper investigates FX risk hedging strategy using forwards versus floating strategy in terms of minimizing total importing costs. The study exposes real-life costs of hedging strategies using forwards comprising theoretical foundations as well as practical implementation example based on real company data. The main question to be answered in the paper is whether it is beneficial to hedge with FX forwards or it is better to float FX exposure.
VL  - 3
IS  - 5
ER  -

Copy | Download