Tag Archives: frmlevel2
Foreign Exchange Risk – Full Details
What is Foreign Exchange Risk?
Foreign exchange risk refers to the risk that an investment value will change due to change in two diff...
What is Basis Risk – Full Understanding
What is Basis Risk
Basis Risk is a type of systematic risk that arises where perfect hedging is not possible. When there is a variation...
What is Cross Hedge and its Impact?
What is Cross Hedge?
When the characteristics of the underlying position match perfectly with that of futures contract specifications, ...
Investment Banking – Full Understanding
Introduction to Investment Banking
Investment Banks: Investment banking is a special segment of banking operation that helps individual...
What is Forward Rate Agreement (FRA)?
What is Forward Rate Agreement (FRA)?
A Forward Rate Agreement or FRA refers to foreign exchange or interest rate hedging strategy. It ...
What are Delivery versus Payment Contracts
Delivery versus Payment Contract:
Delivery versus Payment contracts deals with the settlement of securities. The concept sets forth th...
What is Market Segmentation Theory
Market Segmentation Theory
Bond markets provide bonds with short, medium, and long term maturity to engage investors with respective ...
Dollar Roll Transaction
What is Dollar Roll Transaction?
A dollar roll is the same as the reverse repurchase agreement (buying and selling securities at a hig...
What is Repo Market?
Repo Market:
A Repurchase agreement (repo) is a secured loan for a short period of time. A repo is a kind of short-term borrowing mos...
How is Credit Default Swap (CDS) settled?
What is Credit Default Swap?
A Credit Default Swap (CDS) is a financial derivative, or contract, through which an investor can “swap” ...