4500.12 - Topic 2 Interest Rates and Foreign Exchange: Spot...

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Topic 2 Interest Rates and Foreign Exchange: Spot Markets Staying Competitive in a Floating Rate Environment FX Markets Spot Market (Today’s Topic) Forward Market (Next Topic) Futures and Options Swaps Other Derivatives
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Alternative Exchange Rate Systems Pegged Rates Floating Rates – Free Float – Managed Float Functions of Money Medium of Exchange Store of Value Unit of Accounting
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Better Money, Worse Money What makes some money better? – Swiss Franc – Euro – Yen – U.S. Dollar What makes some money worse? – Ruble – Cruziero – Peso – Rupia Examples of Exchange Rates (1/31/11) Direct Quotes (U.S. Perspective) Swiss Franc 1.0607 CHF 1 = $ 1.0607 Euro 1.3719 1 = $ 1.3719 British Pound 1.6044 £ 1 = $ 1.6044 Japanese Yen 0.0122 ¥ 1 = $ 0.0122 http://finance.yahoo.com/currency?u Indirect Quotes Swiss Franc 0.9428 $1 = CHF 0.9428 Euro 0.7289 $1 = 0.7289 British Pound 0.6233 $1 = £ 0.6233 Japanese Yen 82.015 $1 = ¥ 82.015
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This note was uploaded on 04/15/2011 for the course FINA 4500 taught by Professor Staff during the Spring '08 term at North Texas.

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4500.12 - Topic 2 Interest Rates and Foreign Exchange: Spot...

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