Introduction to Foreign Exchange (FX)

This course discusses the structure and trading conventions of the foreign exchange (FX) markets for both spot (immediate delivery) and forward (future delivery) transactions. You will learn about the characteristics of foreign exchange markets and how to calculate FX rates. This course will use examples to illustrate the no-arbitrage calculation of cross rates and forward rates along with their use for hedging FX exposures.

• Identify the trading conventions used by FX markets for both spot (immediate delivery) and forward (future delivery) transactions.
• Calculate cross rates between two countries.
• Calculate forward exchange rates based on the level of interest rates in each country.
• Understand the use of FX forwards for hedging currency risks.

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