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FINANCIAL MARKET COURSES

FX Forward Market – Cross-Currency Borrowing & Investing

Corporates and fund managers need to analyze all their options when they are investing or borrowing money. The best deal may not be obvious at first, so they need to weigh up the different options – these options can involve borrowing or investing in foreign currencies and the use of swaps to hedge the FX exposure. This course looks at the decision to invest/borrow in a foreign currency and the additional costs that may be incurred when hedging the associated FX risk.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Describe how FX forwards can be used for arbitrage

    Explain how the currency risk can be managed with FX forwards when borrowing and investing in foreign currency

  • COURSE OUTLINE

    Topic 1: Using FX Swaps in Cross-Currency Finance

    Comparative Advantage in International Money Markets

    Domestic vs. International Borrowing

    Calculating the All-In Cost of Borrowing a Foreign Currency

    o Base Currency of an FX Quote

    o Variable Currency of an FX Quote

    Topic 2: Using Relative Value in Different Currencies

    Arbitrage Methods and FX Swaps

    o Money Market Trading

    o Issuing Commercial Paper

    Why Don't Dealers Eliminate Arbitrage Opportunities?

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    60 Minutes

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