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10 Cards in this Set
- Front
- Back
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Exchange Rate |
price of one currency in units of another currency |
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Foreign Exchange Market |
allows currencies to be exchanged to facilitate international trade or financial transactions no specific building or location trading directly from offices and delaing centers of banks |
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Arbitrage |
capitalizing on the differences in quoted prices by making risk-less profit |
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3 types of international arbitrage |
1.Locational 2. Triangular 3. Covered Interest |
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Locational Arbitrage |
Buying a currency on the market for cheap and seeling it for a higher price |
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Triagular Arbitrage |
Capitalizing on the differences between spot and cross rates |
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Covered Interest Arbitrage |
Force a relationship between the iterest rates of two countries |
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Forward Rate |
Specified exchange rate |
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Forward Contract |
An agreement between a corporation and a commercial bank to -exchange a specified amount of money -at a specified exchange rate - on a specified date |
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FR>SR |
Premium |
