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(Forex) Flashcards on Untitled_1, created by thomasdelajoue on 18/04/2013.
thomasdelajoue
Flashcards by thomasdelajoue, updated more than 1 year ago
thomasdelajoue
Created by thomasdelajoue about 12 years ago
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Question Answer
Counterparty Risk The risk that a counterparty will default on a financial obligation.
Liquidity Risk The risk that a financial position cannot be sold quickly at prevailing prices.
Delivery risk The risk that a buyer will not deliver payment of funds after a seller has delivered securities or foreign currencies that were purchased.
Rollover Risk The risk of being closed out from a financial market and unable to renew (or roll over) a short term contract.
Systemic Risk Refers to the possibility that a default by one counterparty somewhere in the world could provoke a ripple or cascade effect, jeopardizing the integrity of the international banking and financial system.
Covered Interest Parity The equilibrium relationship between spot and forward exchange rates and money market interest rates.
Put-call-forward Parity the relationship between put option prices, call option prices, and forward exchange prices.
Currency Swap Parity the relationship between a fixed-rate US$ bond and a floating-rate bond in another currency combined with swaps to emulate a fixed-rate US$ bond.
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