Risk Management Training Programs

The Fundamentals of Foreign Exchange Risk and Derivatives

Réf: FOFERD-205

The Fundamentals of Foreign Exchange Risk and Derivatives

PUBLIC TRAINING
IN-HOUSE TRAINING
TAILOR-MADE TRAINING

IN-PERSON OR REMOTE CLASS

Duration: 2 days

➕ Remote learning activity

2050,00 € VAT Exempt (*)

📌 Reference: FOFERD-205


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(*) As a training organization, Finance Tutoring benefits from a VAT exemption under Article 261-4-4° of the French General Tax Code (CGI).

Course Description

Fundamentals of Foreign Exchange Risk and Derivatives

Intensive 2-day training (14 hours) – Theoretical approach and practical case studies

The Fundamentals of Foreign Exchange Risk and Derivatives course provides you with the tools to master the mechanisms of the foreign exchange market, anticipate currency fluctuations, and implement effective FX risk hedging strategies.


◉ Current Context

In an environment of heightened currency volatility, this training addresses the critical challenges faced by professionals in:

  • Active FX risk management
  • Optimizing international operations
  • Mastering currency derivative instruments

Learning Content

1. FX Market

  • Actors and functioning of the Forex market
  • Exchange rate regimes and monetary policies
  • Exchange rate theories

2. FX Instruments

  • Spot market and quotation conventions
  • Forward contracts and rate calculations
  • Triangular arbitrage

3. Risk Management

  • Hedging strategies
  • Derivatives (swaps, options)
  • Sensitivity analysis

Learning Objectives

  • Master how the Forex market works
  • Differentiate between spot and forward
  • Apply exchange rate theories
  • Analyze the impact of economic policies
  • Calculate cross and forward rates
  • Design hedging strategies
  • Use currency derivatives
  • Assess counterparty risk

Target Audience

Treasurers
Fund Managers
FX Analysts
Risk Managers
Traders

◉ Available both in-person and online ◉ Training materials provided ◉ Certificate of completion

Training Program

The Fundamentals of Quantitative Finance

I. Foreign Exchange Market Ecosystem

  • Functions of the foreign exchange market
  • Various uses of the forex market
  • Size of the foreign exchange market
  • Main instruments:
    • Spot
    • Futures contracts
    • Forward contracts
    • Options
    • FX swaps
  • Main participants:
    • Banks
    • Corporations
    • Governments
    • Funds
    • Individuals

Quiz:

Match the given instrument types and participants with their corresponding definitions.

II. Different Exchange Rate Regimes

  • The Gold Standard
  • Floating exchange rate regime
  • Fixed exchange rate regime

Focus:

The European Union's single monetary policy.

III. Exchange Rates and Balance of Payments

  • The Marshall-Lerner condition
  • Price elasticity
  • Balance of payments and exchange rates
  • Current account balance and capital account balance
  • Contributions from economic theories:
    • Covered and uncovered interest rate parity
    • Purchasing power parity

Case Study:

Assess the impact of monetary and fiscal policy on the exchange rate of a fictitious country.

IV. Exchange Rate Quotation Conventions

  • General principles
  • Cross rates and triangular arbitrage
  • Forward rates

Case Studies:

  • Calculating a forward rate
  • Examining a triangular arbitrage scenario

V. Foreign Exchange Hedging

  • Using a forward contract
  • Using an option
  • Using a currency swap

Case Study:

Using a forward contract for hedging against exchange rate risk.

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