Semester: 2012 Instructor: Eberle Table of Contents Introduction 3 Country Factors & Monitoring Central Bank Intervention 4 Foreign Exchange Market & Movements in Currency 5 Currency Futures & Options 7 Arbitrage Opportunities & IFE 8 Monitoring Exchange Rate Trends & Risk 9 Direct Foreign Investment 11 Capital Budgeting 12 Corporate Governance & Country Risk Analysis 14 Capital Structure 15 Long-Term International
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affect Interest Rate is: * Opportunity Cost: 2.8% * Inflation: 2% * Risk: * Default Risk * Interest rate risk: Up and down arrow mark. Interest rate should include all of the above * Different securities have different kind of risk * Real Rate * Nominal Rate = Real Rate + Inflation, 5% = 3% + 2% * Mortgage Rate is highly correlated to 10 year treasury rate * LIBOR * Demand of the dollar is going down because of Chinese currency. Chinese
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Great mistakes in currency exchange system in Iran Foreign exchange rates is a key point in good performance of economic system in each country. Currency exchange rates is a key variable in regulating incoming and outgoing of capital, importing and exporting goods in an economy. Exchange rates is one of the most important factors in maintaining competition potentials of a country in international markets and as a result, non-oil exportation of the country, and an important factor for being independent
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non-domestic entity. International bonds are issued in countries outside the United States, in their native country's currency. They pay interest at specific intervals, and pay the principal amount back to the bond's buyer at maturity. International bonds include eurobonds, foreign bonds and global bonds. A different type of international bond is the Brady bond, which is issued in U.S. currency. Brady bonds are issued in order to help developing countries better manage their international debt. International
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Market Foreign exchange market allows one currency to be bought/sold for another currency ie. permits transfers of purchasing power denominated in one currency to another. Interbank market – wholesale market in which major banks trade with one another. Accounts for ~95% of foreign exchange transactions (Retail mkt . ~ 5%) Spot market – where currencies are traded for immediate delivery Forward market – where contracts are made to buy or sell currencies for future delivery Swap transactions – involve
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A Appreciation - A currency is said to 'appreciate' when it strengthens in price in response to market demand. Arbitrage - The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets Ask (Offer) Price - The price at which the market is prepared to sell a specific currency in a Foreign Exchange Contract or Cross Currency Contract. At this price, the trader can buy
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Value of VND compared with ASEAN member currencies? Facts LECTURE: TRAN LINH DANG STUDENTS OF TC201DE01-0100 1. Phan Nguyễn Ngọc Xuân Mỹ 101537 2. Vũ Thị Hường 101574 3. Trương Linh Trang 101579 4. Nguyễn Đỗ Thiên Trang 093304 2012 – 2013 -------------(((((------------- SUBJECT INTRODUCTION TO BANKING AND FINANCIAL Value of VND compared with ASEAN member currencies? Facts LECTURE: TRAN LINH DANG
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transactions. Identify which transactions are influenced by interest rates or interest income. (CAUTION: Some can be influenced by both!) Risk Types: Interest rate risk, Credit risk, Technology risk, Foreign exchange rate risk, Country or sovereign risk |Financial Transactions |Risk Type |Describe and justify risk type |Interest Rate or | |
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1.1 Introduction: Rate at which one currency may be converted into another. The exchange rate is used when simply converting one currency to another currency or for engaging in speculation or trading in the foreign exchange market. There are a wide variety of factors which influence the exchange rate, such as interest rates, inflation, and the state of politics and the economy in each country it also called rate of exchange or foreign exchange rate or currency exchange rate. 1.2 Objective of the
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of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time.[4]
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