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Foreign exchange markets and trading

Unit 7: International Financial EnvironmentTopic 1 of 3
Browse the International Business syllabus

International Business

10 units
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What the syllabus expects

  • Foreign exchange markets, Spot market, spot rate quotations, bid-ask spreads, trading in spot markets, cross exchange rates, forward markets, forward rate, long and short forward positions, forwards premium and discount
  • Arbitrage, Hedging and Speculation

Foreign exchange markets and trading

Bachelor of Business Studies (BBS) — Fourth Year

Subject: International Business (MGT 251)

Unit 7: International Financial Environment

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

  • Explain the scope and key elements of foreign exchange markets and trading.
  • Apply the relevant concepts to a defined organizational or venture situation using evidence and stated assumptions.

Curriculum Scope

  • Foreign exchange markets, Spot market, spot rate quotations, bid-ask spreads, trading in spot markets, cross exchange rates, forward markets, forward rate, long and short forward positions, forwards premium and discount
  • Arbitrage, Hedging and Speculation

Detailed Microsyllabus

  1. Spot markets

    1. Explain quotations, bid and ask prices and spreads.
    2. Distinguish direct and indirect quotations.
    3. Calculate cross rates and spot conversions from stated data.

  2. Forward markets

    1. Explain forward rates and long and short positions.
    2. Calculate premiums and discounts using a specified quotation convention.
    3. Distinguish settlement obligations from expectations.

  3. Trading purposes

    1. Compare arbitrage, hedging and speculation.
    2. Illustrate gains, costs and losses with stated inputs.
    3. Assess assumptions and exposure rather than promising risk-free profits.

Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 115–117.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here. Examples involving current laws, rates, institutional products or Nepalese status must identify the relevant period and official materials; no changing numerical or legal requirements are invented here.