foreign-exchange-rates

Learning objectives: Define a volatility smile and volatility skew. Explain the implications of put-call parity on the implied volatility of call and put options. Compare the shape of the volatility smile (or skew) to the shape of the implied distribution of the underlying asset price and to the...

Learning objectives: Describe examples of transaction, translation, and economic risks and explain how to hedge these risks. Describe the rationale for multi-currency hedging using options. Identify and explain the factors that determine exchange rates. Calculate and explain the effect of an...