Currency hedging strategies on a market with carry trade opportunities: Z-company case

The derivative contracts are based on other assets and provide with risk management opportunities, which makes it irreplaceable for investors and companies. Without the basic understanding of market mechanics, it is difficult to comprehend why derivatives are such an important tool, for both speculative and hedging purposes. Just in last 30 years the derivatives market has grown significantly and experienced a lot of innovation driven by market players such as banks and other services providers and global companies exposed to certain risks they must hedge. With the current condition of actively ongoing internationalization of firms, the derivatives markets have become a crucial must-have part of the long-term international company strategy, the basis of success for the enterprise operating in many countries with diverse currency markets. Therefore, the significance of the topic chosen leaves no doubt on the importance of further research on currency hedging strategies.