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...
Learning objectives: Explain and describe the mechanics of spot quotes, forward quotes, and futures quotes in the foreign exchange markets; distinguish between bid and ask exchange rates. Calculate a bid-ask spread and explain why the bid-ask spread for spot quotes may be different from the bid-...
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