When a company's payables and receivables are transacted in a foreign currency, and the risk of loss caused by changes in currency exchange rates. Derivatives are used to hedge against changes in currency exchange rates and reduce transaction exposure [ CITATION Mic14 l 1033 ]. During this time interval, positive or negative risk is exposed to the business enterprise due to the exchange rates may change [CITATION DKE04 l 1033 ]. The sensitivity of the home currency value of assets and liabilities is measured by transaction exposure, which are denominated in a foreign currency to unanticipated changes in exchange rates, when the said assets or liabilities are liquidated. [ CITATION DKE04 l 1033 ]. When conducting business aboard, cash inflows are affected when a variety of currencies are involved. In the case of TMC, incorporated in Singapore, ?and collaborates with Monash University and Newcastle University (both Australia), ?collects SGD fee for every TMC student recruited to study Monash program, and TMC will pay Monash University and Newcastle University in AUD. There a FX risk since TMC is incorporated in Singapore, and fee collected is in SGD [CITATION www15 l 1033 ] Risk to TMC will be, should AUD appreciates against SGD, TMC needs more SGD to exchange for AUD thus their revenue will be lesser [ CITATION DPB76 l 1033 ]. The Australian dollar depreciated and interest rates rose as a result of an announcement of a higher than expected consumer price inflation, and the SGD appreciated and interest rates of AUD rose thereafter [ CITATION CKa95 l 1033 ] TMC will benefit from the exchange, using less SGD to exchange for AUD to make payment to Monash University and Newcastle University [ CITATION DSG85 l 1033 ]. Australia in November 1989 reported that trade deficit jumped 33% in October and business interest rates were at 20 percent [ CITATION New89 l 1033 ]. This was due to existing domestic supplies were not meeting this demand,