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The course introduces the key elements that influence currency movements, and the methods used to hedge exposure of the multinational firm to exchange rate risk. After describing the theoretical basis for determining exchange rate movements, the course explores the use of forwards, futures, options, money market hedges, and swaps to protect the multinational firm. A series of cases are used to teach the appropriate use and costs of the hedging alternatives. The course describes economic and translation exposure and the use of international trade financing instruments.
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