Articles

CISI Exam Prep: Hedging Foreign Exchange Risk – Case Studies and Strategies

CISI Exam Prep: Hedging Foreign Exchange Risk—Case Studies and Strategies Relevant to the following CISI qualifications: Risk in Financial Services, Derivatives, ICAWM DEFINITION A company that imports raw materials, exports finished goods, or has overseas assets or subsidiaries is exposed to fluctuations in exchange rates. Adverse movements can wipe out export profits, while positive changes…

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CISI Exam Prep: Hedging Credit Risk – Case Studies and Strategies

CISI Exam Prep: Hedging Credit Risk – Case Studies and Strategies Relevant to the following CISI qualifications: Risk in Financial Services, Derivatives DEFINITION Credit risk is the uncertainty about the ability of a debtor or the counterparty in an agreement to make a payment. Strategies for managing credit risk use traditional credit analysis techniques to…

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The Structure and Function of the Foreign Exchange Market (CISI Exam Prep)

The Structure and Function of the Foreign Exchange Market Relevant to the following CISI qualifications: IISI, Securities, Global Securities, ICWIM and ICAWM DEFINITION The foreign exchange market, also known as the forex, FX, or currency market, involves the trading of one currency for another. Prior to 1996 the market was confined to large corporate banks…

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CISI Exam Prep: Inflation, Interest Rates & Forex

CISI Exam Prep: Inflation, Interest Rates & Forex The inter-relationship between inflation, interest rates and foreign exchange rates has always been a popular area in CISI exams – with varying difficulty across different levels. The recent turmoil in the Turkish Lira provides an excellent case study that would help students understand how the three pillars…

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Solving CISI Exam Questions: Share Capitalisation (bonus) Issues

Share Capitalisation Issues: Ex-scrip price and effects on the Balance Sheet A case study on Emirates NBD   Capitalisation issues, otherwise known as bonus issues or scrip issues, are shares issued by the company to existing shareholders free of charge. Although mostly intended to reward shareholders, bonus issues are an effective way for a company…

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