[MUSIC PLAYING] PC NARAYAN: Rapid globalizationover the last few decades has resulted in an exponentialincrease in cross-border trade and flow of capital across countries.
That, in turn, has resulted in aninterconnected ecosystem of banks and financial institutions acrossthe world engaged in foreign exchange transactions that are continuouslygrowing in volume, sophistication, and complexity.
That, in turn, has attracted a plethoraof participants in the foreign exchange markets whose explicit intentionis to either profit from or hedge against the risks implicit in virtuallyall foreign exchange transactions.
My name is PC Narayan.
I have been with the Indian Instituteof Management Bangalore for the last 13 years, engaged in teaching,research, and consulting, primarily in the area of banking and finance.
This course, titledForeign Exchange Markets– Instruments, Risks,and Derivatives, will help you unravel the intricaciesassociated with foreign exchange markets and the complex transactionsundertaken in those markets.
So what can you expectto learn in this course? Well, firstly, the theoriesgoverning foreign exchange, such as interest rate parity,purchasing power parity, nominal versus real exchange rates,et cetera; transactions traded in the foreign exchange market,such as spots, forwards, swaps, et cetera; how are exchangerates quoted; who are the participants in theforeign exchange market; why and how do central banks intervenein the foreign exchange markets; the natural type of risksencountered in the foreign exchange markets, such as transaction exposure,operating exposure, translation exposure, and so on; how are theserisks identified and managed; and finally, the structure androle of currency derivatives, such as currency swaps, currencyoptions, currency futures, et cetera.
So join me in this interestingjourney to understand foreign exchange markets, which, as youmight already be aware, is one of the largestand perhaps the most complex of financialmarkets in the world today.
I look forward to seeingyou in the course.