Deal contingent forward and Investment: Difference between pages

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''Foreign exchange risk management''.
1. ''Economics''.
Expenditure by firms on (or creation by firms of) capital goods and stock to be used for future production or sale.


A deal contingent forward is a specialised forward foreign exchange (FX) contract.


The hedging customer is only obliged to fulfil the contract if a planned major transaction, such as an acquisition, occurs.
2.  


 
More broadly, the expenditure of money or money's worth with a view to increasing over time the value invested.
:<span style="color:#4B0082">'''''Reverse complexity'''''</span>
 
:"There is quite often a risk around the FX of these transactions, which comes from the fact that we are raising equity in sterling to make a euro transaction acquisition.
 
:Obviously, if the relative value of sterling and the euro changes between the point that you commit to raise the sterling and spend the euros, there is a risk associated.
 
:That involved us putting in place a deal contingent forward.
 
:This is basically a forward contract where the banks agree with you that if the transaction does not occur, then it expires worthless, but if the transaction goes through, then you get a specific FX rate."
 
:''Adam Richford FCA FCT, Group Treasurer, Renewi, The Treasurer, August 2018, p18.''




== See also ==
== See also ==
* [[Acquisition]]
* [[Active]]
* [[Equity]]
* [[Aggregate demand]]
* [[Foreign exchange forward contract]]
* [[Asset risk]]
* [[Foreign exchange risk]]
* [[Associate]]
* [[Forward contract]]
* [[Cash investing in a new world]]
* [[Hedging]]
* [[Divestment]]
* [[Transaction]]
* [[Injection]]
* [[Investment Committees]]
* [[Investment company]]
* [[Investment risk]]
* [[Investor]]
* [[Non-investment product]]
* [[Passive]]
* [[Payback period]]
* [[Robo-adviser]]
* [[Short-term investments]]


[[Category:Manage_risks]]
[[Category:Investment]]

Revision as of 20:21, 6 June 2020

1. Economics.

Expenditure by firms on (or creation by firms of) capital goods and stock to be used for future production or sale.


2.

More broadly, the expenditure of money or money's worth with a view to increasing over time the value invested.


See also

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