In: Other Topics

Submitted By SHAMIM12
Words 10160
Pages 41
Chapter One

Foreign exchange refers to the financial transaction where currency value of one country is traded into another country’s currency. The whole process gets done by a network of various financial institutions like banks, investors and governments. The exchange rate varies according to the value of each country’s currency which is based on the health of that particular country’s economy. Any individual or company engaged in overseas business should be aware of the risks of currency fluctuations. Customers without commercial contracts expressed in domestic currency (or fixed by an agreed rate of exchange) are fully exposed to what is known as an exchange risk. Exchange risk may arise because of exchange rate movements in the period from the original commercial contract, to the time of settlement of the domestic equivalent of the foreign currency amount. Foreign exchange risk management is designed to preserve the value of currency inflows, investments and loans, while enabling international businesses to compete abroad. Although it is impossible to eliminate all risks, negative exchange outcomes can be anticipated and managed effectively by individuals and corporate entities. Businesses do so by becoming familiar with the typical foreign exchange risks, demanding hard currency, diversifying properly and employing hedging strategies.
No countries of the world can produce all their necessary commodities and services. So it has to buy the commodities and services which it cannot produce or produce insufficiently from other countries. On the other hand countries producing commodities and services excess of their necessity export a portion of it to other countries. The activities of buying and selling or of exchange of commodities and services between two different countries are done by banks. So Banks play the important role of…...

Similar Documents

Financial Institution

...Company like SBI, BOB, UTI and many others. E. VENTURE CAPITAL COMPANIES :Venture capital Finance is a unique form of financing activity that is undertaken on the belief of high-risk-high-return. Venture capitalists invest in those risky projects or companies (ventures) that have success potential and could promise sufficient return to justify such gamble. Venture capitalist not only provides finance but also often provides managerial or technical expertise to venture projects. In India, venture capital concentrates on seed capital finance for high technology and for research & development. ICICI ventures and Gujarat Venture are one of the first venture capital organizations in India and SIDBI, IDBI and others. F. MUTUAL BENEFIT FINACNE COMPANIES (MBFC's): A mutual fund is a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities/bonds. Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. There are two main types of such funds, open-ended fund and close-ended mutual funds. In case of open-ended fund, the fund manager continuously allows investors to join or......

Words: 2488 - Pages: 10

Personal Finacne

...1. Visit the website of a large national bank, regional bank, or credit union, and use the information you find there to answer the questions below. EXAMPLE: Some large banks you might consider include Bank of America®, JPMorgan Chase®, Wells Fargo®, Citibank®, and U.S. Bank®. a. What is the name of the bank or credit union? (0.5 points) US Bank b. List three facts about savings account options at the bank or credit union you chose. (3 sentences. 1.0 points) There are many options to choose from. Whether you want a special account, a general savings account, or a monitored kids account. It fits your needs. c. List three facts about checking account options at the bank or credit union you chose. (3 sentences. 1.0 points) U.S. Bank gives you choices - and no matter which account you choose, you’ll get a great set of checking account features that anyone can appreciate. It also allows you to do things online. It has great security. d. Does this bank or credit union offer online banking? (0.5 points) Yes e. Would you be likely to choose this as your bank or credit union? Why or why not? List at least two reasons for or against choosing this bank or credit union. (3-6 sentences. 2.0 points) Yes, there is a lot of options to choose from. I can have my account fitted for my use, with parental supervision of course. 2. Visit the website of a second large national bank, regional bank, or credit union, and use the information you find......

Words: 272 - Pages: 2

Bhoomi 2017 Full Movie Download HEVC 200MB Mobile 480p | Les plus populaires | 6 3 2015-10-25The Walking Dead - Thank You