Reference no: EM132615097

Assignment : Foreign Exchange Market

In this assignment, you will write a paper describing spot market and comparing foreign markets to the domestic market.

Scenario:

You work for an MNC where new management trainees are often required to travel internationally. A New Hire Handbook is provided to each of the incoming management trainees. The New Hire Handbook contains information about the corporation as well as some important policies and guidelines. Because of your academic credentials, the Senior Vice-President (SVP) of Human Resources (HR) has asked you to write a section for the handbook describing the foreign exchange market. She thinks this information will assist the new hires during international travel. You met with the SVP of HR to get more details on the assignment.

Since the handbook section you are to write is primarily to aid the new hires understanding exchange rates during travel, the SVP suggested you cover only spot market at this time.

You came away from the meeting with the following requirements for this assignment:

Write a section for the New Hire Handbook describing the foreign exchange market. In this section, you will:

Describe the spot market.

Compare foreign exchange brokers and foreign exchange dealers.

Distinguish the terms direct quotes, indirect quotes, and cross-rates.

Provide an example of a cross-rate calculation, that is, calculate the cross-rate of Argentinean Peso to Euro.