Ed6s 03 Foreign exchange and Eurocurrency markets.pptxVIP

Chapter 3Foreign Exchange and Eurocurrency MarketsLearning objectives? The Eurocurrency market? The foreign exchange market – Foreign exchange rates and quotations – Exposure to currency risk – Hedging exposure to currency risk – The empirical behavior of exchange rates? Financial marketsThe Eurocurrency marketThe foreign exchange marketThe empirical behavior of exchange ratesNotation ?Moving value across currencies and over timeCharacteristics of financial marketsNotation Upper Case Symbols = Priceslower case symbols = changes in a price Ptd = price of an asset in currency d at time tpd = inf