Since 1973 the exchange rates of major currencies have been permitted to
float freely against one another. This, along with an increase in the volume of
the world trade, has escalated foreign currency risk. Exchange rate movements
have a significant impact on companies engaged in international
trade.
In contrast to big multinational companies, that have a broad range of tools
available to reduce their foreign currency exposure, middle-sized companies
have only limited possibilities to hedge their foreign exchange rate risk. The
aim of the paper is to examine all available hedging techniques...