Arbitrage, Hedging, and Speculation: The Foreign Exchange Market

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Greenwood Publishing Group, 2004 - Business & Economics - 221 pages
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Explains arbitrage, hedging, and speculation from the standpoint of a participant in the foreign exchange market-whether an individual trader or an institutional trader-who possesses analytical skill, economically sound judgment, and who has access to market data. In the foreign exchange market, arbitrage involves the simultaneous purchase and sale of a currency in different markets; the profit comes from the difference in the buying and selling prices. Hedging and speculation are opposing strategies for dealing with risk; hedging is a cover, and speculation is an assumption of risk. Authors also discuss futures, swaps, forward contracts, and other strategies. For financial scholars, students, analysts, and currency traders.

 

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Contents

2 Currency Futures Swaps and Hedging
19
3 Currency Options
51
Simple Options and Exotics
89
5 Arbitrage and Hedging with Spot and Forward Contracts
131
6 Arbitrage and Hedging with Options
155
7 Arbitrage and Hedging with Forward Forward Contracts in Interest Rates
171
8 Speculations in the Foreign Exchange Market
185
Index
215
Copyright

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Page 9 - York foreign exchange mid-range rates below apply to trading among banks in amounts of $1 million and more, as quoted at 4 pm Eastern time by Reuters and other sources.
Page 10 - Special Drawing Rights (SDR) are based on exchange rates for the US, German, British, French and Japanese currencies. Source: International Monetary Fund. European Currency Unit (ECU) is based on a basket of community currencies, z — currency devalued.

About the author (2004)

EPHRAIM CLARK is Professor of Finance at Middlesex University in London.

DILIP K. GHOSH is KLSE Professor of Finance at Rutgers University.

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