Overview of Foreign Exchange and Money Markets

Overview of Foreign Exchange and Money Markets

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CPE CREDITS
7.0
No advance preparation required.
Students will be able to:
  • Define foreign exchange
  • Determine what influences exchange rates
  • Define exchange rate risk and its management
  • Identify mechanics of spot and forwards markets
  • Apply uses of spot and forwards markets
  • Define financial markets
  • Distinguish investment securities from other financial products
  • Define fixed income securities
  • Describe different types of fixed income securities
Introduction to Foreign Exchange
Introduction to FX Markets
  • Definition of foreign exchange
  • Overview of Bretton Woods and developments since WWII
  • What influences exchange rates?

Characteristics of FX Markets

  • Determine FX market size
  • Identify market players in FX
  • Identify FX conventions: major currency and regional codes; quotation of exchange rates

Managing FX markets

  • Define FX risk
  • Identify different types of FX rate risks
  • Evaluate risk management of FX

Spot Trading Mechanics

  • Identify exchange rate quotes
  • Define spot market
  • Evaluate how spot currency trade is conducted
  • Identify settlement process
  • Define settlement risk
  • Understand settlement risk mitigation

Forwards Markets

  • Identify mechanics of forwards markets
  • Apply uses of forwards
  • Evaluate risks and advantages of forwards

Introduction to Money Markets
Overview of Money Markets
  • Define financial markets
  • Distinguish investment securities from other financial products
  • Identify three categories of investment securities
  • Describe securities market segments
  • Describe how markets are organized
  • Describe characteristics of a ''good'' market

Mechanics of Money Market Instruments

  • Define fixed income securities
  • Describe the different types of fixed income securities
  • Calculate money market yields
  • Describe the process of computing for bond yield
  • Explain the price-yield relationship of bonds
  • Describe the price-sensitivity properties of an option-free bond to changes in interest rates
  • Define a yield curve and identify the ''normal'' yield curve
  • Explain how fixed income instruments give rise to interest rate risk for banks

Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.)

Lunch is included for all students taking day classes.