Floating Currency Exchange Rate
Floating Exchange Rate Definition Free floating or Clean floating of a currency occurs when its exchange rates are left free to be determined by the market forces of demand for…
Control and Monitoring of Exchange Position
Control and Monitoring of Exchange Position As a matter of policy each bank establishes "limits" for various case a bank has more centers dealing in foreign exchange, the limit is…
Risks Associated with Foreign Trade
Foreign Trade Risks Why is foreign exchange risk so important today? there are three broad reasons: i. The growth in international trade and financing. ii. The increased magnitude of exchange…
SWOT Analysis of Law company
Law company SWOT Analysis Strengths The main strength of the firm is its human capital. The firm is having staff of over 300. Strong organizational structure. Partners and senior solicitors…
Month-end Revaluation – Net Spot Position and Forward Position
The calculation of profit or loss on net foreign exchange position is carried out monthly through what is termed as month-end revaluations. A simple but effective method to calculate separately…
CONTROL AND MONITORING OF EXCHANGE POSTIION
As a matter of policy each bank establishes "limits" for various case a bank has more centers dealing in foreign exchange, the limit is allocated to each center. Such limits…
What is overbought position and oversold position?
OVERSOLD POSITION Where the liabilities and sales of a bank in a particular foreign currency exceed the assets and purchase of the same currency the bank is said to have…
Fixed Forward Contract and Option Forward Contract
What is a fixed forward? Fixed Forward is a type of forward exchange contract which provides for taking up or delivery of the foreign currency on a fixed data in…
Difference Between Overbought and Oversold
Overbought and Oversold Overbought means that a bank’s assets and purchases of a particular foreign currency exceed its liabilities and sales of that currency. Where oversold means that a bank’s…
Difference Between Interest rate and Exchange rate
Interest rates and Exchange rates The question of interest rate arises when currencies are borrowed or lent; whereas exchange rates are involved when different currencies are being bought or sold.…
Difference Between Hedging and Speculating
Hedging and speculating Hedging means avoiding or covering foreign exchange risk. The need for hedging arises because exchange rates fluctuate continuously. Accordingly, individuals, companies and banks who expect to make…
Difference between Pips and Points
Pips & points: A point is a unit of decimal, the fourth place to the right of the decimal () whereas a pip is the fifth place to the right…
How to register Domain Name?
Online Beginners Start small and spend less. Choose Your Domain Name Every website starts with a great domain name. What is a domain name? What is a TLD? Think of…
Types of Options
There are two basic types of options: Put Option and Call Option CALL OPTION: This option gives the buyer the right to purchase or “call away” a specified amount of…
Foreign Currency Options
We have examined the two main methods of covering an exchange rate fluctuations risk The traditional forward exchange contract, andThe currency futures contract. An option is an agreement between two…