IN-HOUSE COMPANY TRAINING
Duration
Adjustable
Format
On-site or remote
Custom pricing
Reference
FOFERD-205
Training Course | Risk Management | The Fundamentals of Currency Risk and Derivatives - Finance Tutoring
Risk Management Training Programs
Fundamentals of Foreign Exchange Risk and Derivatives
Discover the mechanisms of foreign exchange risk and the tools used to measure and hedge it. This module covers currency exposures, forward contracts, FX options, currency swaps, and the hedging strategies employed by companies and financial institutions to manage exchange rate fluctuations in a globalized environment.
Réf: FOFERD-205
IN-PERSON OR REMOTE CLASS
Duration
2 days
Additional activity
Remote
2,050 € VAT excluded
VAT exemption according to article 261-4-4° of the French Tax Code
Reference
FOFERD-205
(*) As a training organization, Finance Tutoring benefits from a VAT exemption under Article 261-4-4° of the French General Tax Code (CGI).
Course Description
Fundamentals of Foreign Exchange Risk and Derivatives
Intensive 2-day training (14 hours) – Theoretical approach and practical case studies
The Fundamentals of Foreign Exchange Risk and Derivatives course provides you with the tools to master the mechanisms of the foreign exchange market, anticipate currency fluctuations, and implement effective FX risk hedging strategies.
◉ Current Context
In an environment of heightened currency volatility, this training addresses the critical challenges faced by professionals in:
- Active FX risk management
- Optimizing international operations
- Mastering currency derivative instruments
Learning Content
1. FX Market
- Actors and functioning of the Forex market
- Exchange rate regimes and monetary policies
- Exchange rate theories
2. FX Instruments
- Spot market and quotation conventions
- Forward contracts and rate calculations
- Triangular arbitrage
3. Risk Management
- Hedging strategies
- Derivatives (swaps, options)
- Sensitivity analysis
Learning Objectives
- Master how the Forex market works
- Differentiate between spot and forward
- Apply exchange rate theories
- Analyze the impact of economic policies
- Calculate cross and forward rates
- Design hedging strategies
- Use currency derivatives
- Assess counterparty risk
Target Audience
Treasurers
Fund Managers
FX Analysts
Risk Managers
Traders
◉ Available both in-person and online ◉ Training materials provided ◉ Certificate of completion
Training Program
The Fundamentals of Quantitative Finance
I. Foreign Exchange Market Ecosystem
- Functions of the foreign exchange market
- Various uses of the forex market
- Size of the foreign exchange market
- Main instruments:
-
- Spot
- Futures contracts
- Forward contracts
- Options
- FX swaps
- Main participants:
-
- Banks
- Corporations
- Governments
- Funds
- Individuals
Quiz:
Match the given instrument types and participants with their corresponding definitions.
II. Different Exchange Rate Regimes
- The Gold Standard
- Floating exchange rate regime
- Fixed exchange rate regime
Focus:
The European Union's single monetary policy.
III. Exchange Rates and Balance of Payments
- The Marshall-Lerner condition
- Price elasticity
- Balance of payments and exchange rates
- Current account balance and capital account balance
- Contributions from economic theories:
-
- Covered and uncovered interest rate parity
- Purchasing power parity
Case Study:
Assess the impact of monetary and fiscal policy on the exchange rate of a fictitious country.
IV. Exchange Rate Quotation Conventions
- General principles
- Cross rates and triangular arbitrage
- Forward rates
Case Studies:
- Calculating a forward rate
- Examining a triangular arbitrage scenario
V. Foreign Exchange Hedging
- Using a forward contract
- Using an option
- Using a currency swap
Case Study:
Using a forward contract for hedging against exchange rate risk.