Chapter 9

Forex in the Corporate Environment


In this chapter, you will learn the following:

• How Forex is used in accounts payables and receivables

• What is Exchange Rate Risk

• The basics of Forex forward rates

• The basics of using Forex futures

• The basics of using Forex options

In addition to using Forex to increase the returns of a portfolio and to provide a leveraged method of producing interest income, there is a third application of the FX market. In this chapter you will learn the basics of using Forex outside of the spot market by using derivatives. Derivatives allow the hedging of risk of the price of an FX pair in the future. Forex derivatives (a derivative is a financial instrument that “derives” its value ...

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