Chapter 17 Flashcards
Foreign exchange
The act of trading different nations’ moneys
Exchange rate
The price of one nation’s money in terms of another nation’s money
What are the two basic types of exchange rates, depending on the timing of the actual exchange of money?
The spot exchange rate
The forward exchange rate
The spot exchange rate
The price for immediate exchange
The forward exchange rate
The price set now for an exchange that will take place sometime in the future, at a specified time
The retail part of the market
Trading done with customers
The interbank part of the market
Trading done between the bank active in the market
A foreign exchange swap
A package trade that includes both a spot exchange of two currencies and an agreement to the reverse forward exchange of the two currencies
When the parties to the trade have only a temporary need for the currency
