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Clearly Explain How Dealers Set Their Forward Exchange Rate Quotes

question 42

Essay

Clearly explain how dealers set their forward exchange rate quotes.What would be the consequences if they did not set forward rates in this way? Use examples to illustrate your answer.


Definitions:

Notice of Breach

A formal notification given to a party indicating that they have failed to fulfill their contractual obligations.

Grade A

A classification denoting the highest quality or excellence in a certain category.

Grade B

Refers to a quality or classification of a product, often seen in agricultural products, suggesting it meets specified standards but is below the highest quality.

Nonconformity

A failure to meet agreed standards or specifications, deviating from a norm or standard.

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