Foreign Exchange - CH2 Flashcards
1
Q
2 ways FX transactions are carried out?
A
- Spot transactions.
- Forward transactions.
2
Q
What is a Spot transaction?
A
- Immediate transfer of currency at the current market price.
- Settles within 2 working days (T+2).
3
Q
What is a Forward transactions?
A
Currency deals that are agreed for at a future date but for the fixed exchange rate now.
4
Q
What is the Buying and Selling rate?
A
The bid price and the offer price.
5
Q
How do FX dealers make money?
A
The spread between the bid price and offer price.
6
Q
What are the 2 broad camps of FX?
A
- International trade driven.
- Speculative (ie US falling against the Euro).
7
Q
A
