fx1_lecture - The Foreign Exchange (forex) Market Forex 1...

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1 Forex 1 lecture: Foreign exchange markets Read Chapter 8 (S.C.) Foreign exchange activity Bid ask spreads Spot and cross rates Triangular arbitrage Week 10, FNCE102 R. Loh 2 ± The forex market is the physical and institutional structure through which one country’s currency is exchanged for that of another. ± The forex market is the largest financial market in the world. It is open somewhere in the world 24 hours, 365 days a year. ± Largest forex-trading countries: 1. UK 2. . 3. . 4. . 5. . The Foreign Exchange (forex) Market 3 BIS triennial survey of forex activity 2007 (see BIS handout) ± Daily volume of trade is equivalent to USD1.808 trillion (in 2004 survey) How about in 2007 survey? ± How does this compare this to world import/export numbers? ± Types of transactions? ± Whose is trading? Counter party statistics. ± Most traded currencies? ± Most traded currency pairs? 4 Markets and quotes ± Types of markets { Spot { Forward (week 3) { Swap ± Types of quotations { Direct (home currency per unit foreign currency) versus indirect (foreign currency per unit home currency)
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This note was uploaded on 06/06/2009 for the course SOB FNCE102 taught by Professor Rogerloh during the Spring '09 term at Singapore Management.

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fx1_lecture - The Foreign Exchange (forex) Market Forex 1...

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