Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
A bond whose payments are made in foreign currency has unknown cash flows in domestic currency. This is because the cash flows are dependent on the exchange rate prevalent at the time the payments are received from the issuer. This amounts to currency or exchange rate risk because it is the risk that arises from the change in price of one currency against the other.
For example, an investor's domestic currency is the US dollar and he purchases a bond whose payments are in Indian rupees. If the rupee depreciates relative to the US dollar at the time a payment is made, fewer US dollars can be exchanged.
Consider an investor in Japan. His domestic currency is the yen. If he purchases a US dollar denominated bond, then he is concerned that the US dollar will depreciate relative to the Japanese Yen at the time the issuer makes a payment. If the dollar does depreciate, then he will receive fewer yen in the foreign exchange market.
Thus, the risk of receiving less domestic currency on bond investment where it makes payments in a currency other than the investor's domestic currency is called exchange rate risk or currency risk.
Your family purchased a house three years ago. When you bought the house you financed it with a $160,000 mortgage with an 8.5% nominal interest rate (compounded monthly). The mortg
Inventory is sometimes thought of as a necessary evil. Explain. Inventory ties up funds and these funds aren't earning an unambiguous return. Some inventory is habitually nec
What is Performance appraisal - cost of capital Performance appraisal further, cost of capital framework can be used to evaluate financial performance of top management. I
Q. What is Cash Credit? A cash credit is an arrangement by which a bank allows his customer to borrow money up to a certain limit against some tangible securities or guarantees
Define the conversion and competitive effects of exchange rate changes on the company's operating cash flow. Answer: The competitive effect: Exchange rate modifications may in
Trading Mechanism Of Future: Flow of the Order Any person who wants to trade in futures has to contact a Futures Commission Merchant (FCM) or a broker. First, let us look
Examine about Environmental (external) analysis "A study that considers potential environmental effects during planning phase before an investment is made or an operation start
Valuation and Exit Valuation: The Net Asset Value is used as a base for ascertaining the prices applicable to investor subscriptions and redemptions. Fund administrator perform
what is overtrading
Q. Conservative Approach of Financial Management? An exact matching plan may not be followed in practice. A firm may adopt a conservative approach in financing its current and
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd