PREFACE

Intended Audience

An Introduction to Foreign Exchange Market Instruments is specially designed for students of finance who plan to study foreign exchange market.As foreign exchange market is originated from the UK，financial centers of foreign exchange are located mainly in the UK and the US，and English is the language applied in software and program for quantitative analysis，English is essential for a better understanding of foreign exchange market.To meet the bilingual teaching's call and to fulfill the gap between job demand and current education supply，this book is written in English.It can be used in advanced undergraduate in the major of finance，international finance，international monetary economics，and international financial management.It is also an ideal textbook for English-speaking readers.

Presentation

Grew from the lecture notes for undergraduate students at Chongqing Technology and Business Unversity，the text has proved to be successful.As an introduction book，lacking necessary expertise in foreign exchange is assumed from readers.Mathematically sophisticated undergraduates should be able to read it on their own.Numerical techniques are presented and the underlying financial theory is covered.Each chapter is followed by case studies，exercises and further readings.Case studies are mainly about foreign exchange practice.An integral part of the text is exercises placed after the relevant materials with answers provided in the end.

Organization

An Introduction to Foreign Exchange Market Instruments offers a concise yet comprehensive overview of international currency markets，financial products in foreign exchange market，and fundamental applications of quantitative models.By introducing cases and examples，this book presents basic knowledge in international monetary theory，foreign exchange market，and investment analysis.

With the application of the basic principles on real world problems，especially with China's cases，the book provides guidance on how to solve exchange rate trade issues as well as practical foreign exchange products management.

This book is composed by the following 7 chapters：

Chapter 1 surveys the exchange rate regimes and introduces international monetary systems.

Chapter 2 illustrates the evolution of worldwide foreign exchange market and introduces the foreign exchange market in China.

Chapter 3 states the conventions of foreign exchange spot.Algorithm expressing is outlined.Chapter 4 contains foreign exchange forward and probes deeper into interest rate parity that links forward，spot and interest rates.

Chapter 5 covers foreign exchange swap and introduces fundamental algorithm analysis about swap.

Chapter 6 is about foreign exchange futures and investigates basic foreign exchange futures trade conventions.

Chapter 7 discusses the fundamental theory and practice of foreign exchange option.