What is the spot market for FX? What is the forward market for FX? What is the position of being net long in a currency?
Answer to relevant QuestionsWhat motivates FIs to hedge foreign currency exposures? What are the limitations to hedging foreign currency exposures?Explain the concept of interest rate parity. What does this concept imply about the long-run profit opportunities from investing in international markets? What market conditions must prevail for the concept to be valid?X-IM Bank has ¥14 million in assets and ¥23 million in liabilities and has sold ¥8 million in foreign currency trading. What is the net exposure for X-IM? For what type of exchange rate movement does this exposure put the ...Sun Bank USA has purchased a 16 million one- year Australian dollar loan that pays 12 percent interest annually. The spot rate of U.S. dollars for Australian dollars is $ 0.625/A$1. It has funded this loan by accepting a ...Suppose that the current spot exchange rate of U.S. dollars for Australian dollars, S US$/A$, is 1.0277 (i. e., $ 1.0277 can be received for 1 Australian dollar). The price of Australian-produced goods increases by 5 percent ...
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