UPRAVLJANJE VALUTNIM RIZIKOM
CURRENCY RISK MANAGEMENT

Author(s): Silvije Orsag, Dejan Mikerević
Subject(s): Business Economy / Management, International relations/trade, Globalization
Published by: Finrar d.o.o Banja Luka
Keywords: foreign exchange; currency risk; forex; option; swap; futures;
Summary/Abstract: Currency risk represents one of the most significant challenges faced by companies in modern economic conditions and a globalized business environment. In our work, we focused on transaction exposure to currency risk and the possibilities of insurance against such risk in order to avoid the negative effects of the volatility of numerous national means of payment that circulate in the international financial system. Various methods of protection against exchange rate changes are used nowadays, while the paper analyzes the spot and forward market with examples of the use of options, futures, swaps and other derivative securities as opportunities to systematically manage currency risk. The foreign exchange market (FOREX, FX) is the largest financial market where more than eight billion dollars are traded daily and this is the result of the growth of international trade, the integration of national capital markets into a single globalized world market and a large number of international transactions.

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