Foreign Exchange Introduction The volume of international exchange has grown tremendously since World War II Whenever an exchange takes place between residents of different countries, one kind of money has to be exchanged for another
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You have $1 million to invest. Interest rates in Germany are
much higher than in the U.S., so you decide to invest in a one-
year German T-bill with a market yield of 9%. What is your
holding-period yield for the year?
DM 1,744,000/(2 DM/$) = $872,000
Wednesday, February 19, 2003
The New York foreign exchange selling rates below apply to trading among banks in amounts of $1 million and more, as quoted at 4 p.m. Eastern time by Bankers Trust Co., Dow Jones Telerate Inc., and other sources. Retail transactions provide fewer units of foreign currency per dollar.
Currency U.S. $ equiv. per U.S. $Country Wed. Wed.
Australia (Dollar) .5942 1.6829