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Academic Journal of Business & Management, 2023, 5(23); doi: 10.25236/AJBM.2023.052309.

Research on Foreign Exchange Derivatives Market and Enterprise Trading Risk Neutrality

Author(s)

Xiaohan Zhang

Corresponding Author:
Xiaohan Zhang
Affiliation(s)

School of Economics, Nankai University, Tianjin, 300110, China

Abstract

The ongoing financial liberalisation has made two-way fluctuations in the foreign exchange rate the norm. This has significantly increased market participants' demand for foreign exchange derivatives transactions and also stimulated the foreign exchange derivatives market's rapid growth. The market’s growth is extremely crucial because it not only helps import and export businesses manage exchange rate risks in an environment with more flexible fluctuations, but it also supports exchange rate reform and the RMB's internationalisation process. This paper will analyse the foreign exchange derivatives market and issues related to the risk-neutral trading of foreign exchange derivatives by enterprises, so as to provide theoretical reference and countermeasures for developing derivatives market and promoting enterprises to use derivatives reasonably.

Keywords

Foreign exchange derivatives market; Hedging; Risk-neutral; Foreign exchange options and swaps

Cite This Paper

Xiaohan Zhang. Research on Foreign Exchange Derivatives Market and Enterprise Trading Risk Neutrality. Academic Journal of Business & Management (2023) Vol. 5, Issue 23: 57-61. https://doi.org/10.25236/AJBM.2023.052309.

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