Tuesday, January 6, 2009

Investing in the Forex Market


To understand the efficient markets hypothesis in the context of foreign exchange trading, consider the options
open to an American bank (or firm) that temporarily has excess funds to be invested overnight

The bank could lend that money in the overnight bank money market, known as the federal funds market. The

simple net return on each dollar invested this way would be the overnight interest rate on dollar deposits. The bank has other

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