Chapter 8: Interest Rates and Currency Swaps
What is interest rate risk?
Types of interest rate risk
How to manage interest rate risk?
What is Swap?
Types of swap
Use of swap in managing interest rate risk.
International Finance: Lecture 2 Foreign Exchange Market
Foreign Exchange Market:
- Provides a market whereby money of one country can be exchanged for money from
- Determines the exchange rate of two currencies.
- Where foreign currency
Interest Rates and Exchange Rates:
- International Fisher effect: Relationship between the percentage change in the spot
exchange rate over time and the differential between comparable interest rates in
different national capital markets.
o The spot excha
Chapter 16: International Portfolio & Diversification
1. Rate of Return in the international situation
2. International diversification and risk
3. Computing the risk and return of a portfolio in the international situation
Transaction Exposure. Name the four main types of transactions from which
transaction exposure arises.
1. Purchasing or selling goods or services on credit when prices are stated in foreign
2. Borrowing or lending funds when repayment is to be
The exchange rate between JPY and A$ is JPY80.23/A$
a) What is the direct quote from an Australian perspective?
Foreign exchange quotes can be either described as direct or indirect. In this pair of
definitions, the home country of the curren
International Finance Tut 1
Question 4: Theory of Comparative Advantage
Provides us with a theory which justifies international trade given a world model which
assumes free trade, perfect competition, no uncertainty, costless information, and no
Purchasing power parity. Define the following terms:
a) Law of one price
The law of one prices states that producers prices for goods or services of identical quality
should be the same in different markets; i.e., different
ASYRAF MUQRI BIN MUSTAFA
18106815 MIRI, CS
Analysis on shareholders
Analysis on risk return
Return analysis on the end of financial year
Securities Market Line (SML)
Optimal investment decision for Maxis