Currency Derivatives
Introduction
Currency derivatives come in to existences as a hedging tool. As against unfavourable appreciation and depreciation of a single currency. Exporter, importer and financial investor have developed a vast range of currency derivative instruments are also used by speculators willing to arrange future currency selling or buying contracts while hoping hoping to buy or sell the currency at favourable anticipated exchange rates in the future. This act of speculator exposed them to the risk of financial fluctuation.
Currency based derivatives are complex financial instruments that are “derived” from the underlying currency exchange rate. They includes currency forward “buying” or “selling” contract, …show more content…
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