Chap09The Foreign Exchange Market课件.pptVIP

Chapter The Foreign Exchange Market Case: The Axis hedges the Euro In 1999 Axis Ltd, prices sales to European customers in Euros Euro plunges against the dollar causing lost revenues To hedge against adverse currency movements Axis enters into forward exchange contracts The foreign exchange market Foreign exchange market: A market for converting the currency of one country into the currency of another. Exchange rate: The rate at which one currency is converted into another Foreign exchange risk: The risk that arises from changes in exchange rates Functions of the foreign exchange market