GMS 724 Lecture Notes - Lecture 5: Foreign Exchange Market, Reserve Currency, Spot Contract
1 Mar 2016
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Document Summary
To identify the major characteristics of the foreign-exchange market and how governments control the flow of currencies across national borders. To examine the different institutions that deal in foreign exchange. To understand why companies deal in foreign exchange. Operation necessity to buy goods from the other country. Foreign exchange: money denominated in the currency of another nation or group of nations. It can be in the form of cash, funds available on credit and debit cards, traveler"s checks, bank deposits, or other short-term claims. Foreign exchange market: where exchange transactions take place (e. g. bank) Exchange rate: price of a currency o o o o o o o o o. Dealers can trade currency by telephone or electronically through reuters, ebs, or bloomberg. In addition to currency trades, these companies also provide market data, news, quotes, and statistics about different markets. Otc (over the counter) commercial and investment banks. The foreign exchange market has two segments o o.
