1 / 3

Foreign Exchange

Foreign Exchange. FOREX. 16. Computation of Forward Rate and how the forward quotes are expressed. a) FR = SR + Interest Differential between two countries (Converted into amount) b) Expression of Forward Quote :

diamond
Download Presentation

Foreign Exchange

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Foreign Exchange FOREX

  2. 16. Computation of Forward Rate and how the forward quotes are expressed. a) FR = SR + Interest Differential between two countries (Converted into amount) b) Expression of Forward Quote : Outright FR SWAP Point (margin) Annualized Premium or Forward Point or Discount (in %) Outright FR : This is not directly quoted but it is derived using SR and Forward Point. This is an Exchange rate agreed today for settlement in future.

  3. SWAP point : It represents interest difference converted into amount or simply it is a difference betweenoutright FR and today's Spot Rate. SWAP Point = Rate of - Rate of × SR × n Quote Base 12 Annualized Premium or Discount : This also represent Interest differences but expressed in %. SR × rq - rb or SR × rq - rb 1 + rb Exact Approx

More Related