Foreign Exchange in Practice: The New Environment (Finance and Capital Markets Series)

Foreign Exchange in Practice , now in its 3rd edition, is the single reference to the foreign exchange market any financial practitioner needs to have. It explains the concepts involved in foreign exchange and their application to real-life situations. The book was originally developed as a textbook for the Citibank Bourse Course, an intensive course available to clients and staff of Citibank to improve their mastery of these complex markets. The course has been taught in 50 countries since 1975. This new edition includes the Euro amongst its currencies, expansion of material on interest rate concepts, exotic options and value at risk. Cover......Page 1 Contents......Page 6 Preface......Page 14 CHAPTER 1 Exchange Rates......Page 16 CHAPTER 2 Interest Rates......Page 27 CHAPTER 3 Cash Flows and Value Dates......Page 44 CHAPTER 4 Yield Curves and Gapping in the Money Market......Page 56 CHAPTER 5 Bid and Offer Rates......Page 76 CHAPTER 6 Forward Exchange Rates......Page 93 CHAPTER 7 Applications of Forward Exchange......Page 116 CHAPTER 8 Swaps......Page 145 CHAPTER 9 The FX Swaps Curve and Gapping in the Foreign Exchange Market......Page 184 CHAPTER 10 Currency Options – Pricing......Page 196 CHAPTER 11 Applications of Currency Options......Page 237 CHAPTER 12 Option Derivatives......Page 263 CHAPTER 13 Factors Affecting Exchange Rates......Page 295 CHAPTER 14 Value at Risk......Page 306 Solutions to Practice Problems......Page 345 Appendix: Cumulative Standard Normal Distribution......Page 390 Glossary of Terms......Page 393 Index......Page 402 Foreign Exchange in Practice , now in its 3rd edition, is the single reference to the forex market any financial practitioner needs to have. It explains the concepts involved in foreign exchange and their application to real-life situations. Numerous examples are given. The book was originally developed as a textbook for the Citibank Bourse Course, an intensive course available to clients and staff of Citibank to improve their mastery of these markets. Examples in this edition have been updated to reflect current rates and include the Euro rather than the former European national currencies. The 3rd edition contains a substantial amount of new content particularly with regard to financial mathematics, interest rate swaps, option pricing and applications of option derivatives and Value at Risk.

Originally developed as a textbook for use in Citibank training courses, this work describes concepts and practices from foreign exchange markets, emphasizing the interrelatedness of interest rates. Topics include yield curves and gabbing, forward exchange, swaps, currency options, and value at risk. The course is based around a simulation game and examples from the game are include throughout. Annotation ©2003 Book News, Inc., Portland, OR

This chapter introduces the basic conventions used to describe exchange rates and the profits or losses that result from changes in exchange rates.