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How currency forwards can be employed to hedge

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"Exchange rate risk management is an integral part in every firm's decisions about foreign currency exposure (Allayannis, Ihrig, and Weston, 2001). Currency risk hedging strategies entail eliminating or reducing this risk, and require understanding of both the ways that the exchange rate risk could affect the operations of economic agents and techniques to deal with the consequent risk implications (Barton, Shenkir, and Walker, 2002)".

"Currency Forwards is the obligation to buy or sell in underlying asset at some given price at some point in the future".

Question1 : Discuss the extent to how Currency forwards can be employed to hedge currency risk management on the stock exchange market of Mauritius.

Reference no: EM132522728

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