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