Lecture11 - Foreign Bonds bonds sold outside the country of...

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Foreign Exchange Exchange Rate Types Free Floating Pegged Banded Peg Non Convertible Foreign Exchange Markets Types of Markets Over the Counter (OTC) Exchange Traded Trade Time Frames - Spot Trade Time Frames – Forward Outright forward contract – currency at a specified rate on a specified date at least 3 days out FX Swap – simultaneous spot and forward transaction Currency swap – swap of currency and interest at a specified date Options Call – Right to buy at specified price by specified date  Put – Right to sell at specified price by specified date Exchange Rate Tables Currency Arbitrage Geographic arbitrage – London, Chicago Cross rate arbitrage –Pound, Dollar, Yen Eurocurrencies Eurodollars – US dollars held outside the US Eurocurrencies – other currencies held outside their home country
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Unformatted text preview: Foreign Bonds - bonds sold outside the country of the currency in which they are denominated Eurobonds – bonds sold by a country or entity using a different currency then their home currency $US as a World Currency 85% of all currency exchanges have the $US as half the transaction $ is investment currency in many capital markets $ is a reserve currency held by many central banks $ is a transaction currency in many international commodity markets $ is an invoice currency in many contracts $ is an intervention currency employed by monetary authorities in market operations to influence their own exchange rates Global Equity Markets Foreign Stocks Euroequity offering Global equity offering World Market Capitalization...
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Lecture11 - Foreign Bonds bonds sold outside the country of...

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