International Banking and Trade Finance. Chpt 3. Overview. Corporate use of:. Foreign exchange market Eurocurrency market Eurocredit market Eurobond market International stock markets.
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and Trade Finance
Corporate use of:
“The most common type of 4X transaction is for immediate exchange at the Spot Rate”
Why would it be that the chart on page 67 shows German Marks, Japanese Yen and British Pounds being used much more than Canadian dollars - cause isn’t Canada the largest trading partner with the U.S.?
Because Cdn dollar business done by Canadian banks
and because Cdn business with the U.S. is more frequently quoted in U.S. dollars anyway - negating the need for conversion
bid/ask spread = (ask-bid)/ask
Direct Quotes are used in Madura’s Text
Refer to your green handout on the IMF
Value of $CD in DM = $0.7236/$0.6077
Value of $CD in DM = $0.6757/$0.5297
= 1.275 17 May 1999
Using the handout of 17May99, calculate the cross rate
The difference between a Futures Contract and a Forward Contract is that the
Future Contract specifies the volume on a specific date
- sold on an Exchange
, the Foward Contract specifies the exchange rate
- sold by commercial banks