Managing currency and interest-rate risk

Abstract

The purpose of this dissertation is to examine those techniques that actors in the financial environment can adopt to control and reallocate financial risks primarily those arising from currencies and interest-rates. This paper foreshadows financial derivatives as the principal risk management tools available to economic agents. This dissertation is divided into three main parts. Part One examines the main factors which seem to have conditioned the mutation in the financial environment. It then introduces the reader to the judgmental derivative instruments, i.e. forwards, futures, swaps and options, from which all offer derivative techniques originate.