Page 31 - FINAL CFA I SLIDES JUNE 2019 DAY 6

Session Unit 5:
20. Currency Exchange Rates

LOS 20.b: Describe functions of and participants in the foreign exchange market.., p.158

Sell side participants: Buy side participants:

• Multinational banks • Multinational corporations,
• Investment fund managers, • Investment fund managers,

• Hedge fund managers, and • Hedge fund managers,

• Governments. • Investors,

• Governments, and

• Central banks (the buy side).

Participants are termed:

• Hedgers if they enter into transactions that decrease an existing foreign exchange risk;

• Speculators if they enter into transactions that increase their foreign exchange risk.