Foreign Exchange (FX) Market

Question 1

Market participants

Answer 1

Hedger = ceux qui se couvrent, FX contracts et FX risk they want to reduce/eliminate

Speculators = aucune position réelle à se couvrir, no FX risk

Question 2

Sell side (vendent devises étrangères )

Answer 2

Market markets: large multinational banks

Question 3

Buy side (besoin de devise étrangère)

Answer 3

Corporations

Real money account: don’t use derivatives (mutual funds)

Leveraged account: use derivatives (hedge fund)

Governments

Retail markets

Question 4

Spot market

Answer 4

Spot exchange rates, exchange for immediate delivery

Taux sur les marchés présentement

Question 5

Forward contract

Answer 5

Agreement to buy or sell a specific amount of a foreign currency at a future date at the aurez forward exchange rate

Pour transactions futures on s’entend sur le taux change a l’avance