Suppose you are a Chief Financial Officer (CFO) of a UK based listed company. The company is currently trading at 10 per share and 10 million shares in issue. The total market value of the issued share capital of the company is 100 million. You have been requested to write a report to the board of directors with respect to raising an additional funding of 50 million to enable the next stage of development of international projects to be carried out.

This additional funding will allow the business to become more global with the opportunity to develop a market in numerous countries with payment being made in the local currency. The directors are conservative in their attitude to risk. You have been requested to provide a report to the directors critically evaluating alternative derivatives including forwards, futures, options and swaps that are available in the market in order to minimise the risk with respect to payment in international currencies.