With the information from the prior two questions, what is the implied Yen per dollar exchange rate?

Q: Discuss the key differences between the operation of a currency forward market and a  futures…

A: Foreign exchange, also known as Forex or FX, is the process of converting one currency into another…

Q: What is the current market view on USD/JPY? (Will it appreciate and which depreciate? and why?)

A: USD/JPY will be reflecting the exchange rate of Japanese currency with respect to 1 American dollar.…

Q: The nominal rate equals the real rate plus the inflation rate. True False

A: Nominal interest rate sometimes is also called as stated interest rate.

Q: What are two benefits of a single currency like the Euro?

A: In finance, a currency is a medium through which goods and services are exchanged between the buyers…

Q: Define foreign currency hedges.

A: Definition:   Hedge: The process through which the risk associated with a particular project, can be…

Q: How can we obtain a pay-domestic-floating, receive-foreign-fixed currency swap by using a…

A: A currency swap is the exchange of interest (and occasionally principal) in one currency for the…

Q: Will US$/C$ futures exchange rate go up or down? 2. Will US$/C$ spot exchange rate go up or down?

A: The value of one country's currency in presented terms of the value of another country's currency is…

Q: Describe about the foreign currency risk.

A: Foreign currency- As we know every country has its own currencies in which it operates. Hence,…

Q: Define spot, forward, and swap transactions in the foreign exchange market and give an example of…

A: The foreign exchange market (also known as the Forex or FX market) is a decentralized global market…

Q: Define each of the following terms: f. Spot rate; forward exchange rate; discount on forward rate;…

A: The spot rate shall be the value of a good, security, or monetary system for immediate payment.…

Q: How does the interest rate parity condition Maintain equilibrium in the foreign exchange Market?

A: The question asks how the interest rate parity (IRP) condition helps keep the foreign exchange…

Q: Critically evaluate the argument that fixed exchange rate regime is better than flexible exchange…

A: Fixed exchange regime refers to that regime in which exchange rate in a country remains fixed…

Q: explain what economists attribute so much attention to Real Exchange Rates? Provide an answer that…

A: Exchange rates are the rates in which one currency could be exchanged into the currency of another…

Q: Which are two types of interest rates are used in equivalence calculations?

A: Equivalence calculation is used for analysis of an investment or a project based upon the the…

Q: Explain with examples how to measure exchange rate risk for long positions and short positions Notes…

A: Forex (Forex or FX) is the trading of one currency against another. For example, you can exchange US…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.