Financial futures contracts were first introduced by International Monetary Markets Division of Chicago Mercantile Exchange in order to meet the needs for managing currency risks, and promoted by a galloping growth in international business. London International Financial Futures and Options Exchange (LIFFE), set up in 1982 had been dealing in currency futures, but have restricted their activity to interest rate [...]
The large and multinational companies often rely heavily on the international financial markets. Interest rates change continually which makes these markets extremely volatile. It is one of the responsibilities of the Treasurer to manage the interest rate risk of the firm and should able to identify the methods available for hedging interest rate risk. An enterprise should be cautious about [...]
A forward exchange contract is "a commitment to exchange (buy or sell) one foreign currency for another at a specified exchange rate, with the exchange taking place on either a specified future date or during a specified future period". In a forward contract, one party agrees to deliver a specified amount of one currency for another at a specified exchange [...]