Applied Financial Mathematical Model for Derivative Instruments and Hedging Exchange Rate
Journal Title: International Journal of Academic Research in Accounting, Finance and Management Sciences - Year 2013, Vol 3, Issue 4
Abstract
Currently, the international economic transactions are regularly occurring. The statistics of imports and exports were published by the General Administration of Customs that the total turnover of the country's imports in year of 2012 was 228.37 billion U.S. dollars, increased by 12.1 % in comparison with the results of 2011. Thus, this is the 2nd year in a row total export and import turnover of Vietnam exceeded $ 200 billion. This result shows that the foreign currency transactions of Vietnam economy are growing and exchange rates are regularly fluctuated in the foreign exchange market. The objective of the article is application of derivative instruments to hedge exchange rate fluctuation. From the data of actual economic events, the article uses the financial mathematical formulas to evaluate spot rate, forward rate, put and call options rate and finds out the results of the impact factors of exchange rate risk and the effectiveness of the application of derivative instruments for financial hedging. The research results show that the application of derivative instruments is necessary to minimize financial risk and how to bring high economic benefits?
Authors and Affiliations
Doan Van Dinh, Guangming Gong
Keywords
Related Articles
- EP ID EP104545
- DOI 10.6007/IJARAFMS/v3-i4/405
- Views 100
- Downloads 0
The Determinants of Relationship Between Budgetary Participation and Budgetary Slack
The objective of this study is to test the influence of budgetary participation on budgetary slack, as well as to test whether or not information asymmetry, job relevant information, goal orientation, organizational comm...
The Effect of Capital Structure, Shareholders and Major of the Company on the Conservative Practices in Companies
Capital Adequacy of the Jordanian Banking Sector for the Period 2000-2013
The study seeks to identify the capital adequacy of the Jordanian banking system for the period 2000-2013. The researcher adopted the descriptive and the analytical approaches to identify the capital adequacy of the...
The Interactive Effects of Cause Related Marketing Campaigns, Perceptual Brand Equity Dimensions and Cultural Values on Consumer Purchase Intentions
The purpose of this research is to investigate the kind of relationship between Cause Related Marketing (CRM) campaigns, brand perceptual dimensions and cultural traits as possible antecedents of consumer purchase intent...
Microfinance in Ghana: Development, Success Factors and Challenges
Microfinance is defined as the provision of financial services such as loans to low-income households, the poor and microenterprises. Over the past decade, microfinance institutions (MFIs) have sprang up rapidly in the M...