The Master's thesis deals with management of the foreign exchange risk in international trade. Initially the essential theoretical framework is introduced and then applied on the real situation of a Czech internationally trading company. The first chapter explains individual types of foreign exchange exposure, principal foreign exchange forecasting methods and foreign exchange risk evaluation methods. The second chapter deals with internal techniques of lowering foreign exchange exposure and external hedging tools. In the third chapter the improvement recommendations are stated based on an analysis of company's foreign currency denominated cash flow, subsequent evaluation of its foreign exchange position and assessment of its current approach to foreign exchange risk.

The aim of this Diploma thesis is to describe and explain how to identify, quantify and eliminate negative effects of exchange rate fluctuation. Both internal and external methods of hedging are considered. A recommendation of an appropriate complex hedging strategy relating to a specific Czech technological company forms the second part of the thesis. This provides a guidance to practical use of the theoretical relations described in the first part.

Thesis "The use of currency futures in the business in terms of CR" deals with financial derivatives. Defines the various types of derivatives, their history and development of currency futures and forward contracts in the CR and in the world. Another part is devoted to the use of currency futures and forwards in the business in the Czech Republic. The thesis is to evaluate the evolution of exchange rates EUR/CZK and USD/CZK.

With an increasingly globalized world of multinational firms dominating the global market, firms have discovered the impact of transaction exposure on their business. To handle the risk, firms can hedge their transaction exposure with currency derivatives. This paper aims to determine and explain what variables, beyond the size of the transaction exposure, affect firms’ usage of currency derivatives for hedging purposes. Previous research shows a divided estimation of what underlying causes. The variables studied to explain the usage of currency derivatives are industry affiliation, size of firm, geographical dispersal and profitability. With a sample size of 70 major Swedish internationally active non-financial firms, a multiple regression analysis was constructed to potentially demonstrate causality. To create a method triangulation, an interview with a currency derivatives expert was conducted as a complement to the quantitative strategy. The result of this paper indicates that industry affiliation possibly affects firm’s usage of currency derivatives for hedging purposes, however none of the studied variables show a sufficient statistical significance to prove a causality. / Med en allt mer globaliserad värld med multinationella företag som dominerar den globala marknaden har företagen upptäckt transaktionsexponeringens påverkan på dess verksamhet. För att hantera risken kan företag säkra sin transaktionsexponering med hjälp av valutaderivat. Denna studie ämnar till att fastslå och förklara vilka variabler, utöver transaktionsexponeringens storlek, som påverkar svenska rörelsedrivande företags användande av valutaderivat i säkringssyfte. Inom tidigare forskningen råder delade meningar om vilka bakomliggande orsaker som påverkar företags användande av valutaderivat. De variabler som undersöktes för att förklara användandet av valutaderivat är företagens branschtillhörighet, dess storlek, verksamhetens geografiska spridning samt dess lönsamhet. Med ett urval på 70 stora svenska internationellt verksamma rörelsedrivna företag gjordes en multipel regressionsanalys för att påvisa samband mellan användandet av valutaderivat i transaktionssäkringssyfte och påverkande variabler. För att skapa en metodtriangulering genomfördes även en intervju med en valutaderivatexpert som ett komplement till den kvantitativa strategin. Resultatet av studien indikerar på att branschtillhörighet möjligen kan påverka företagens användande av valutaderivat men ingen av de studerade variablerna uppvisade en tillräcklig signifikans för att statistiskt säkerställa sambanden.

This diploma paper describes the process of managing of exchange rate risk in an export company. At the beginning of the work there is short overview of the basic concepts of the exchange rate theory. The next part is focused on the determination of the exchange rate and on the basic methods of exchange rate prediction -- fundamental, technical and psychological analyses. These chapters are followed by the next steps in the process of the exchange rate risk managing with a view to the analyses of the firm's exchange exposition (especially to its quantification) and to instruments used to exchange rate hedging (especially to currency derivatives). In the end of the diploma paper there is a brief summary of development of the financial crises 2008/09 with reference to its influence on the exchange rate of the Czech crown to Euro.

This thesis concerns with problematic of FX risk management in a mid-sized export-oriented company. The theoretic part of the paper explains fundamental and origin of FX risk and summarizes process of its management with emphasis on specifics of mid-sized companies. Further, selected hedging techniques and instruments are introduced. With employment of available statistics and analysis, main advantages and disadvantages of hedging are demonstrated. For practical application of theory presented, real data from mid-sized company are used. After analyzing financial and accounting statements, concrete risks arising from exchange rate volatility are identified. Finally, concrete recommendations for the management are offered, which could lead to lowering FX exposure and reducing impact of changes in exchange rates on economy of the firm.

The thesis is focused on the management of exchange rate risk in international trade. The work is divided into theoretical and practical part. The first part deals with the theories of the exchange rate, exchange rate risk and also on its management. The most common way of risk hedging is the use of currency derivatives. Therefore their advantages and disadvantages will be presented. In the practical part, theoretical knowledge will be applied to foreign exchange risk management of a specific Czech international trading company. After evaluating of its current approach, more effective hedging strategy will be suggested.

Using a sample of 141 U.S. small-cap industrial firms, I examine the firm characteristics that influence its use of foreign exchange derivatives to hedge exchange rate risk. Companies in the industrial sector produce goods and services that are used for the production of another final product. The performance of this sector is closely correlated to the level of demand from the final consumer. I find firm size, the amount of foreign sales, and firm liquidity influence the firm's decision to use foreign exchange derivatives to hedge exchange rate risk. For those firms that hedge exchange rate risk using derivatives, a second test examines the firm characteristics that influence the extent of its hedging activities. I find the extent of hedging is influenced by the amount of foreign sales, the amount of foreign assets, and the number of foreign subsidiaries the firm operates. A final test examines whether certain firm characteristics influence its decision to use options as part of its hedging operations. I find no evidence that the firm characteristics examined herein influence that decision.

The aim of the thesis was to develop an effective hedge strategy for a Czech importing pharmaceutical company. To this goal, I used both theoretical knowledge from the first and second chapter, and internal data of the company. Particularly, this thesis is dedicated to its management, however, it may also inspire those who are interested in this issue.

Cette thèse étudie l’effet des variations du taux de change sur la valeur de l’entreprise, les déterminants de la politique de couverture et le rôle des conflits d’agence. Les résultats montrent que la non-significativité de l’exposition au risque de change est expliquée par une asymétrie de la couverture. Le niveau de couverture de change dépend des économies d’échelle, du risque de détresse financière et du niveau d’exportations de l’entreprise. Nos résultats révèlent, aussi, que la rémunération des dirigeants en actions et en options réduit le risque de change résidu de la couverture. / This PhD thesis examines exchange rate movements’ effect on firm value, determinants of hedging policy and the role of agency conflicts. Results show that non-significance of foreign exchange rate exposure is explained by an asymmetric hedging. Firm hedging level depends from scale of economies, financial distress risk and it exports level. Our empirical results demonstrate, also, that CEO shares and stock-options compensations have negative effect on foreign exchange risk that is residue from hedging.