How do enterprises cope with floating exchange rates

Author: Wang Jian
Publisher:
Publish Date: 2005-10-01
Features: Under the floating exchange rate system of the RMB, enterprises have begun to face exchange rate risks. How to avoid exchange rate risks and turn them into profits has become a new challenge and task for enterprises. This book adapts to the changes, focuses on applications, and concisely and clearly outlines the various financial derivative instruments in the financial market. These financial derivative instruments provide enterprises with opportunities for hedging, speculation, and arbitrage, as well as new tools for risk management, inventory management, and asset portfolio management. They are a powerful tool for enterprises to adapt to exchange rate system reforms and turn floating exchange rate risks into profits.
The features of this book: This book is aimed at enterprises, explaining the principles of the foreign exchange market and financial derivative instruments, and introducing effective methods to turn exchange rate risks into profits after the floating exchange rate of the RMB. There are three main features of the book:
1. Adapting to changes and focusing on applications. After the floating exchange rate of the RMB, China's financial industry will rapidly develop financial derivative instruments. The various financial derivative instruments in the financial market provide enterprises with opportunities for hedging, speculation, and arbitrage, as well as tools for risk management, inventory management, and asset portfolio management. The financial derivative instruments introduced in this book are a powerful tool for adapting to exchange rate system reforms and turning floating exchange rate risks into profits.
2. Systematic content and innovative structure. The book not only introduces the basic principles of the foreign exchange market and foreign exchange transactions but also systematically elaborates on the three major categories of derivative instruments based on the different underlying assets of the financial derivative instruments:
- Currency derivative instruments, including forward foreign exchange contracts, foreign exchange futures, foreign exchange options, currency swaps, and hybrid transaction contracts based on the above contracts;
- Interest rate derivative instruments, including interest rate futures, interest rate options, interest rate swaps, and hybrid transaction contracts based on the above contracts;
- Equity derivative instruments, including stock index futures, stock options, stock index options, and hybrid transaction contracts based on the above contracts.
3. Concise and easy to understand. The book introduces theories in a simple and clear manner, focusing on applications and selecting examples. The theoretical discussions in each chapter are concise, logical, and to the point, simplifying formulas and reducing charts. To facilitate understanding and application, examples are provided after definitions and principles for illustration and explanation.