Here is the synopsis of our sample research paper on Hedging as Risk Management for Exchange Rate Risks in Microfinance Funds. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 23 page paper looks at the way heading may be used as a viable took to reduce the impact of exchange rate risks on microfinance funds. The paper looks at the concept of microfinance, how and why exchange rate risks exist and the way hedging may be used to reduce these risks in both a theoretical and practical manner. The bibliography cites 16 sources.
Page Count:
23 pages (~225 words per page)
File: TS14_TEmicrofinance.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
Strategies 10 4.1 Operational Approaches 10 4.2 Hedging 10 4.2.1 Hedging Theory 11 4.2.2 Derivatives 15 4.3 The Practice of Hedging 18 5. Conclusion 24 1. Introduction In recent years the interest in microfinance funds has increased, this is
not surprising given their general performance when compared to the rest of the investment market, in a recent CGAP report it was shown that microfinance funds ha have been outperforming
traditional funds, with the top ten microfinance funds seeing a 32% increase in assets in 2008, a year of recession when the emerging markets1 funds saw an average of a
20% decline (Reille and Glisovic-Mezieres, 2009). The microfinance market for investment is relatively constrained due to the specialist nature of the microfinance funds, by the beginning of 2009
there were only 104 active funds in the US with a total of $6.5 billion under investment, which indicates that despite this being a relatively specialist market, it one that
is sufficiently large to warrant attention (Reille and Glisovic-Mezieres, 2009). It is a market where there are some inherent risks due to the nature of the underlining investments.
Microfinance is not a new concept, but today it is one that is seen mainly used in the developing world. This exposes the funds to risk in addition to those
expected within investments, such as business risks, there are also political risks that tend to be higher in the developing world, as well as currency exchange risks, generally less stable
developing countries with floating exchange rates2 tend to show a higher level of volatility compared to the developed countries (Floyd, 2009). There may be little a fund manager can do
to reduce political risk, other than in the way that investments are chosen and consideration is given to their location and the political influences that may be exerted over those
...