The valuation of currency forwards are based on some of the very basic principles of Macroeconomics.
Interest rate parity:- According to the Interest rate parity principle, suppose you invest in your home country and earn a return, this return has to...
Thursday, 14 July 2011
Derivatives for dummies - Currency Forwards
Continue Reading - Derivatives for dummies - Currency Forwards
Monday, 4 July 2011
Derivatives for dummies: Hedging strategies using forward contracts
An important question that the investors face is how to protect their portfolio in times of volatility. One way is getting out of the cash markets (stock market) for now and entering again when market stabilizes. But this strategy may lead to a lot...
Friday, 1 July 2011
Derivatives for Dummies II
FORWARD MARKETS AND CONTRACTS
FORWARD CONTRACTS
A forward contract is a contract between two parties in which one party agrees to buy and one party agrees to sell a particular asset at a particular date in future. Suppose today is June 13th and the...
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