Foreign Exchange Exposure
Meaning The term foreign exchange exposure is relevant for the companies involved in import or export of goods or services,
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Foreign Exchange
International Arbitrage
Meaning of International Arbitrage International Arbitrage is the process of selling and buying the foreign securities and ADRs simultaneously for
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Triangular Arbitrage or Three Point Arbitrage
What is Triangular Arbitrage? Triangular Arbitrage is the result of mis-match of exchange rate of three currencies. Under this mechanism
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Two Point Arbitrage
Meaning of Two Point Arbitrage Buying a currency in one market and selling it at higher price in another geographically
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COVERED INTEREST ARBITRAGE
MEANING OF COVERED INTEREST ARBITRAGE Under Covered Interest Arbitrage (CIA) arbitrageur takes the advantage of interest rate differential between two
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International Fisher Effect
What is International Fisher Effect Theory ? International Fisher Effect theory is combo of two theories, fisher effect and relative
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Fisher Effects
What is Fisher Effect Theory? Fisher Effect theory is created by economist Irving Fisher. According to this theory real interest
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Purchasing Power Parity
What is Purchasing Power Parity? The Purchasing Power Parity (PPP) theory connects forex market to commodity market. According to this
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Interest Rate Parity
What is Interest Rate Parity? Interest rate parity is a no-arbitrage condition. In simple word an investor will not be
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NOSTRO, VOSTRO AND LORO ACCOUNT
Nostro Account: – Conversion of foreign currency in to home currency is the fundamental of foreign exchange. Therefore, the bank
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