Foreign Exchange and Money Markets: Theory, Practice and Risk Management
Floating rates, central-bank intervention, derivatives trading and the very high volumes of speculative and round-the-clock trading are just a few of the facets of the foreign exchange marketplace that make it a highly dynamic and volatile arena. This book addresses the practical applications of foreign currency trading and money market trading and provides comprehensive coverage of these markets.\ Coverage includes:\ * What the instruments are\ * How and why they are used - by both bank...
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Floating rates, central-bank intervention, derivatives trading and the very high volumes of speculative and round-the-clock trading are just a few of the facets of the foreign exchange marketplace that make it a highly dynamic and volatile arena. This book addresses the practical applications of foreign currency trading and money market trading and provides comprehensive coverage of these markets.Coverage includes:* What the instruments are* How and why they are used - by both bank dealers and corporate end-users* How the different instruments are linked one to another* How you price them* Structure of the market, EMU etc* The range of risks arising from dealings in these instruments that affect banks and corporates* How these risks are measured and managed* Brings together a range of practical, relevant material on Foreign Exchange and money market trading.* Focuses on trading situations as well as on calculations* International in coverage, the concepts and methods covered are not restricted to any country or institution
About the AuthorNote from the AuthorPt. 1Introduction11Some Basic Concepts32Essential Financial Arithmetic8Pt. 2Money Markets233Overview of Money Market Instruments254Deposits and Coupon-Bearing Instruments365Discount Instruments506Forward Interest Rates, FRAs and Introduction to Futures60Pt. 3Foreign Exchange917Spot Foreign Exchange938Forward Outrights and Swaps1079Hedging Swaps with Deposits, FRAs and Futures, Covered Interest Arbitrage and Creating Synthetic FRAs14910Managing the Spot Risk on a Forward FX Position17311Currency Relationships182Pt. 4Risk Management19312Bank Risk Management19513Corporate Risk Management230Answers to Exercises251App. AA summary of money market day/year conventions271App. BA summary of calculation procedures273App. CSWIFT currency codes284Glossary291Index323
