BU52006 Global Risk Analysis ASSIGNMENT Session 2020/21 Submission deadline: 11:45am GMT on 5th March 2021 Submit your assignment electronically on My Dundee in “BU52006 > Module Assessment > Assignment > Assignment Submission”. Late submission penalties apply. Answer the following questions about hedging transaction exposure to foreign exchange risk: (1) Name the four main contractual hedging techniques for managing transaction exposure. (10) (2) Explain how these techniques can be used to hedge the transaction exposure of a foreign currency payable contract. (Word limit: 800 words ± 10%) (40) (3) Draw a diagram showing the possible outcomes of these hedging alternatives for a foreign currency payable contract. (20) (4) Discuss the circumstances under which some of the contractual hedging techniques might be preferred to the others. (Word limit: 400 words ± 10%) (30)
