The following points highlight the four main products of currency derivatives. The products are: 1. Forward Contract 2. Futures Contract 3. Options Contract 4. Swaps. 1. Forward Contract: Forward contracts are used by companies and individuals to hedge currency risk. In December 2003, the RBI permitted resident individuals to enter into forward contracts to hedge their foreign exchange risk. Resident [...]
Between 1900 and 2000 many countries in Asia, Africa and Latin America emerged from colonial rule and the consequent 'legacy' exchange rate regimes that were imposed upon them. Inevitably a narrative of the evolution of the international financial system is principally a narrative of negotiations and agreements reached between developed countries. Developments in the international monetary system are given below: [...]
Each overseas affiliate prepares its profit and loss statement and balance sheet, in its measurement currency. There are three aspects relating to translation. Currency for Translating the Affiliates' Financial Statements: The functional currency of MNC affiliates is the currency of the primary economic environment of the affiliate. In some countries—such as the USA—the accounting standard relating to translation prevents affiliates [...]