FINS3630 Lecture Notes - Lecture 8: Forward Market, Longrun, Forward Exchange Rate

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The measurement of foreign exchange risk to which fis are exposed. Geographical dispersion and continuous operation - 24/5. Spot market for foreign exchange (fx): trading for immediate delivery. Forward market for foreign exchange (fx): trading for future delivery. Direct quote: the price of the foreign currency expressed in terms of local currency. Indirect quote: the price of the local currency in terms of foreign currency: usd 0. 87/aud, aud 1. 15/usd [answer] domestic per foreign dollar. In the lecture notes and exam, we will use australia as the home currency. Spot exchange rate: the rate for immediate exchange of currencies at a specified rate. Forward exchange rate: the exchange of currencies at a specified rate at some specified date in the future. Potential loss in foreign currency positions and/or net investments denominated in foreign currencies due to investments denominated in foreign currencies due to the movement of foreign exchange rates (i. e. , the movement in prices of foreign currency)

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