Hedging against interest and exchange rate risks in Czech companies
|Author:||Bc. Viktor Jasanský|
|Year:||2008 - summer|
|Leaders:|| prof. Ing. Oldřich Dědek CSc.
|Work type:|| Bachelors
|Awards and prizes:||B.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance and for an extraordinarily good bachelors diploma thesis.
|Abstract:||Hedging against financial risks in Czech companies is currently burgeoning and is a major concern. It remains true, however, that in the Czech Republic only large companies hedge themselves sufficiently. Small and medium firms underestimate these risks, particularly currency risk. Important losses stemming from floating exchange and interest rates can be avoided by diverse hedging strategies like using derivative instruments. The first, rather theoretical, part of my thesis where I anatomize both interest and currency risks, is devoted to these derivative instruments. The offer of Czech banks and other financial institutions is also included.
The second part of the thesis is more practical. A case of a true approach towards hedging against currency risk in a large company using currency forwards is studied. It is followed by a description of the process and obstacles that occured during the time of the hedge as well as an ex post calculation determining whether the hedging was worth it or not.
|Downloadable:|| Bachelor Thesis of Viktor Jasanský