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zhusalmz

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Hedging / Derivatives - I used this during our finance test as a response but now I'm not sure if it's entirely correct

In order to minimize the risk of fluctuations in global exchange rates or the changes in the prices of oil, fuel or other important commodities, businesses can use hedging firms in order to protect themselves from risks often faced whilst operating in a Global Environment.
Hedging allows Global managers to plan for the future with some certainty whilst operating in a Global environment, which in itself employs a large degree of uncertainty. Through Hedging Qantas, uses forward cover and options to hedge their future fuel purchases as well as future interest payments locked in at a pre-determined interest rate through a contract to exchange one currency in a forward foreign exchange transaction in the future.

based on BSIA they seem kind of linked maybe idk?
 

john-luke

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A derivative is anything that lessens the risk of currency fluctuations.
Hedging is when two parties agree and finalize a deal on an exchange rate
Hence they arevery closely interlinked or at least that's how I interpret it
 

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