The exchange rate chance dealing with the time delay between entering a contract and settling it. The greater the time differential, the greater the chances the two exchange rates change.
Transaction Risk
Related Terms
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A currency forward is an agreement that locks in an exchange rate the day on which the agreement is signed for a transaction that will be completed later.
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A binary option is a type of options contract in which the payout will depend entirely on the outcome of a “Yes or No?” or “True or False” proposition. Don’t be intimidated! Its name may sound complicated, but binary options are arguably a simpler way to trade than traditional options or currencies. Just like traditional […]
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Forex brokers will quote you two different prices for a currency pair: the bid and ask price. The “bid” is the price at which you can SELL the base currency. The “ask” is the price at which you can...
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Interest rate differential (IRD) refers to the difference between the interest rates of two currencies that are paired together in a currency trade.
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A forward contract involves an agreement between two parties to buy or sell an underlying asset at a predetermined price on a specified future date.