《专英课件7》-精选课件.pptVIP

International Finance After study, you should able to Understand three basis meanings of foreign exchange Know some knowledge about foreign exchange market Grasp four foreign exchange transactions Learn something about Securities and Stocks Foreign Exchange 外 汇 Ⅰ. Definition of Foreign Exchange 1.The system utilized in financing international payments 2. The media used to discharge international obligations. 3. The rates at which foreign exchange is quoted. Ⅱ. Foreign Exchange Market A foreign exchange market is a place in which foreign exchange transactions take place. It is the largest and most liquid financial market in the world, including trading between large banks, currency speculators, governments and so on. Commercial Banks … are the largest and most important dealers in foreign exchange market Foreign Exchange MarketsFour Major Functions Transfer of Payments Provision of Credit Long Distance Payments Allowing Hedging (protection) Against Exchange Risk. Ⅲ. Methods of Quoting Exchange Rates Direct quotation Indirect quotation Direct Quotation Method Under the direct quotation method, the rates are quoted in terms of a variable number of home currency per fixed foreign currency unit . China uses direct quotation. Indirect Quotation Method Indirect Quotation Method, the rates are quoted in terms of a variable number of foreign currency units to the fixed unit of home currency. London practices indirect quotation method. An exchange dealer always quoted two rates, buying rate and selling rate. On the standpoint of the exchange dealer, For direct rates, the maxim is “buy low, sell high” For indirect rates, the maxim is “buy high, sell low” Ⅳ. Foreign Exchange Transactions Spot Transactions Forward Transactions Option Forward Transactions Swap Transactions 1 Spot Transactions Spot Transaction refers to foreign exchange transaction settle