GMS 724 Chapter Notes - Chapter 8: Foreign Exchange Market, The Foreign Exchange, Money Market Fund
15 May 2015
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Document Summary
Foreign exchange: money denominated in the currency of another nation or group of nations. Foreign exchange market: the market in which the currency exchanges take place. Exchange rate: price of a currency number of units of one currency that buy one unit of another currency. The bank for international settlements (bis) divides the market into: reporting dealers (money center banks) Financial institutions that participate in local and foreign exchange and derivative markets. Include the 10 largest banks, all of which are influential in setting prices and are the market makers. Banks other than the money center banks (local and regional banks. Ex. hedge funds, pension funds, money market funds, currency funds, mutual funds, etc. Corporations and governments that also play a role in the foreign exchange market. Dealers can trade foreign exchange: using electronic methods (41. 3%, directly with customers (24. 3%, through the interbank market (18. 5%, through voice brokers (15. 9%)
