Exchange rates and Forex Business
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Bank Financial Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the exchange rate?
The exchange rate is the price of one currency expressed in terms of another currency, determined by supply and demand in the foreign exchange market.
What is the interbank exchange rate?
Rate at which banks trade currencies among themselves
What is a direct quote in foreign exchange?
A direct quote expresses the number of units of domestic currency required to purchase one unit of foreign currency, e.g., INR 84 = 1 USD in India.
What is a pip in the context of forex rates?
Smallest price movement in a currency pair quote
What is an indirect quote in foreign exchange?
An indirect quote expresses the number of units of foreign currency obtainable per unit of domestic currency, e.g., 1 INR = 0.012 USD.
What is a foreign exchange forward contract?
Agreement to buy or sell currency at fixed future rate
What is the bid rate in a forex quote?
The bid rate is the rate at which the market maker (bank) is willing to buy the base currency from the customer; it is always lower than the ask rate.
What is a currency futures contract?
Standardized exchange-traded forward contract on currency
Video classes for this chapter
Exchange rates and Forex Business Part 1
Exchange rates and Forex Business Part 2
Exchange rates and Forex Business part - 3
Exchange rates and Forex Business part - 2
Exchange rates and Forex Business part - 4
Exchange rates and Forex Business
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