Courses Infomation
A Course in Financial Calculus by Alison Etheridge
A Course in Financial Calculus by Alison Etheridge
Forex Trading – Foreign Exchange Course
You want to learn about Forex?
Foreign exchange, or forex, is the conversion of one country’s currency into another.
In a free economy, a country’s currency is valued according to the laws of supply and demand.
In other words, a currency’s value can be pegged to another country’s currency, such as the U.S. dollar, or even to a basket of currencies.
A country’s currency value may also be set by the country’s government.
However, most countries float their currencies freely against those of other countries, which keeps them in constant fluctuation.
Alison Etheridge: A Financial Calculus Course
This material is meant for initial courses in financial calculus aimed at students with a decent foundation in mathematics. The discrete time framework introduces crucial ideas like martingales and change of measure, enabling an approachable explanation of Brownian motion and stochastic calculus. First, the most basic financial scenario is used to develop the Black-Scholes pricing formula. The financial sophistication of the models and instruments is developed in later chapters. More complex subjects, such as stochastic volatility and stock price models with jumps, are covered in the last chapter. Numerous exercises and examples show how the concepts and approaches may be used to answer practical financial concerns.
What is forex?
Quite simply, it’s the global market that allows one to trade two currencies against each other.
If you think one currency will be stronger versus the other, and you end up correct, then you can make a profit.
If you’ve ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet into the currency of the country you are visiting.
Foreign Exchange
You go up to the counter and notice a screen displaying different exchange rates for different currencies.
An exchange rate is the relative price of two currencies from two different countries.
You find “Japanese yen” and think to yourself, “WOW! My one dollar is worth 100 yen?! And I have ten dollars! I’m going to be rich!!!”
When you do this, you’ve essentially participated in the forex market!
You’ve exchanged one currency for another.
Or in forex trading terms, assuming you’re an American visiting Japan, you’ve sold dollars and bought yen.
Currency Exchange
Before you fly back home, you stop by the currency exchange booth to exchange the yen that you miraculously have left over (Tokyo is expensive!) and notice the exchange rates have changed.
It’s these changes in the exchange rates that allow you to make money in the foreign exchange market.
Salepage : A Course in Financial Calculus by Alison Etheridge
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