
440 Derivatives and Risk Management
C A S E S T U D Y
Tamil Nadu Steel is one of the major dealers of steel in the world.
Its headquarters is in Chennai, and it also has a branch oce in
London, United Kingdom. Tamil Nadu Steel purchases steel from
steel companies in India and supplies it to customers in various
parts of the world, except India, as there are a number of Indian
steel companies that provide steel to customers in India.
When Tamil Nadu Steel purchases steel from Indian steel
companies, the price is determined in U.S. dollars, but the money
is to be paid in Indian rupees. When it sells steel to customers in
other ...