What are Junk Bonds?
Junk Bonds A junk bond is issued by a corporation or municipality with a bad credit rating. In exchange for the risk of lending money...
International Finance
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Arbitrage Illustration 13
Arbitrage Illustration 13 Three different Traders are quoting as follows: Trader A 1.2040 CAD per USD Trader B 0.9450 CHF per CAD Trader C 1.1398...
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What is Spread?
Spread : The spread represents the nominal difference between the ‘Ask’ and ‘Bid’ rates of a quotation whereas the % age spread helps to compare...
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Forex Spot and Forward Illustration 11
Mid Rate for Citibank is 43.5050 per dollar. Desired Spread is 0.0200 (per one Dollar Transaction) Forward premium/discount for 1 month is 100/80 and for...
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What is Arbitrage?
Arbitrage : Arbitrage can be defined as an operation which involves simultaneous purchase and sale of equal quantity of asset or currency with the intention...
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Identify direct and Indirect Rates
1) Identify the locations where the following quotations are Direct and calculation the Indirect form : (a) 1 GBP = SGP 4.9572 – 95 (b)...
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Arbitrage Illustration 4
Arbitrage Illustration 4 Consider following spot quotations: USD CHF 1.4950/1.4965 Zurich Bank CHF USD 0.6690 / 0.6700 Bank of New York Are there any arbitrage-gains...
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Identity and Calculate Triangular Arbitrage
Identity and Calculate Triangular Arbitrage : 1) GBP / SUD 1.9658 USD / AUD 1.1676 GBP / AUD 2.065 2) EUR / USD 1.3298 USD...
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Forex Quotation Illustration 12
Forex Quotation Illustration 12 The following quote is given in New York: EUR 1 = USD 1.2596 / 1.2620 Is it a direct or...
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How will you identify a deficit or surplus in Balance of Payments?
If the balance of payment is a double entry accounting record, then apart from errors and omissions, it must always balance. Obviously, the terms “deficit”...
