FINS1612 Chapter 15: Viney8e_IRM_ch15
Document Summary
Foreign exchange: the structure and operation of the fx market. A major difference between a managed float and the crawling peg is that market participants. 1 - generally agree that a currency using the crawling peg is typically undervalued. Learning objective 2: identify and discuss the major groups of participants in the fx markets: participants in the fx markets include those who have underlying commercial and financial transactions denominated in foreign currencies. This includes importers and exporters, and those investing or borrowing overseas in a currency other than their home currency. It is estimated that around the equivalent of usd5 trillion pass through the fx markets each day, facilitated by fx dealing rooms that use sophisticated, technology-based computer and communication systems. 2 - require delivery of the foreign currency and financial settlement two business days from the contract date: forward contracts specify a value date more than two business days from today.
