2. Foreign Exchange
Buyers/sellers of foreign currency -- trade domestic money for foreign money
no centralized location, but NYC, London, Tokyo, Zurich = major trading centers
mostly bank transfers rather than actual trading (debits/credits in bank deposits)
This chapter introduces the idea of the business plan, including the rationale for writing one, the multiple purposes that a business plan can serve both inside and outside the firm, and the key audiences for a business plan. Students will also learn about major imperatives in creating a business plan, as well as some potential pitfalls in writing the business plan.
The outline of the text walks the reader through the process from understanding and conceptualizing the plan, preparing to write the plan, creating the plan and finally, presenting the plan to potential investors and others.
Chapter Outline
Introduction
Reasons for Writing a Business Plan
Who Reads the Business Plan—And What Are They Looking For?
A Firm’s Employees Investors and Other External Stakeholders
Guidelines for Writing a Business Plan
Structure and Style of the Business Plan Content of the Business Plan
Measuring the Business Plan Against Your Personal Goals and Aspirations
Recognizing That Elements of the Plan May Change
Types of Business
The Plan For the Book
Section 1: Starting the Process Section 2: What to do Before the Business Plan is Written
Section 3: Preparing a Business Plan Section 4: Presenting the Business Plan

3. 3 segments of forex market
commercial bank transactions, inter-bank transfers of foreign exchange to satisfy clients' demands (individuals, firms needs and demand forex)
(2) domestic inter-bank transactions
conducted by brokers. Why would banks want to hold forex?

4. (3) international transactions domestic bank or financial organization "trades" with foreign bank

5. Types of forex transactions
Spot market
Exchange rate for currency transactions that take place basically immediately. In practice can’t be right away because it typically takes two days for the checks to
clear used to make the payments.

6. Forward market
Can also arrange currency trade for some date in future. Is one way of hedging against risk of e changes.

7. Currency SWAP
another possibility is to combine a spot with a forward arrangement: i.e. A spot sale, then arrange a repurchase in the future at a set rate. Why do this? Say our electronics store sold some computers in Japan and got yen, know will need them again in a month to buy Sony TVs, but not want to hang on the money in yen over the month, want to hold it in dollars for domestic expenses.
Might be lower brokers fees if arrange both transactions at one time.

8. Factors affecting forex
Fundamental Factors
Political and Psychological factors
Technical Factors
Capital Movement
Relative Inflation Rates
Exchange rate policy and intervention
Interest Rates
Speculation

9. Features of foreign exchange market
Actors
Commercial banks
Corporations
Nonbank financial institutions
Central banks

10. Characteristics
Volume
Banks dealing in e market tend to be concentrated
Highly integrated globally

11. Fundamental of Entrepreneurship
exchange rate quotes in different centers must be the same
Most foreign exchange transactions are between banks and take place in $
BENTR2101
Fundamental of Entrepreneurship

12. Thank You