What is general electric's involvement in the spot and forward market?
What is forward premium How does the forward market help in reducing currency risk in international business?
The forward premium arises due to interest differentials between two currencies. In order that the two currencies have the same intrinsic values as they have today and avoid interest arbitrage, the premium/discount comes into effect.The forward rate includes the forwrd premium/discount and so the risk of spot market moving in the wrong way is minimised by entering into a forward contract.
Capital market is the market for securities where companies or government can raise funds. This includes Stock market, Bond Market, Money market etc. Derivative market is the market for derivatives like future contracts, forward contracts or options which are derived from an asset. Asset may be stocks, Commodities or Currencies.
Can be classified by in different ways !! 1. General 2. Nature General 1. Primary Market 2. Secondary Market 1. Auction Market 2. Dealer Market 1. Over the Counter Market(OTC) 2. Third and Fourth Market Nature 1. Stock Market 2. Bond Market Above written is just an informal and incomplete answer and is for simple understanding ,,, not to be used in presentations and homework
Latin is a very specific language so there were specific words for some markets. Forum was a word used for a market in general, a "macellum" was a market for food or provisions, while a "mercantus" was a business market. If you wanted to use the word as a verb meaning to market, it would be "obsonare".
In forward exchange rate, the rate is booked in advance for a fixed amount and period,which will remain unchanged in case of any market fluctuation or deceleration.In fact forward exchange rate booking is done to protect or guard against volatile market condition. In spot exchange rate, the exchange rate prevalent on a particular date is booked for immediate effect.