* Functions of a central bank: - To implement monetary policy - To influence exchange rates by intervening in foreign exchange markets - To supervise the banking system - To act as a lender of last resort for commercial banks - Ways of implementing monetary policy: * Setting minimum and maximum interest rates to control the credit system * Controlling the amount of banknotes in circulation (issuing and withdrawing banknotes and coins) * Open market operations - selling and …showed first 75 words of 730 total…

…showed last 75 words of 730 total…at a future date. * Futures market vs. spot market=non-contract market * Forwards - deals to buy or sell goods or currencies at a fixed price at some certain future date, non-standardised Options Option - contractual right to buy or sell a financial security at a certain price on a certain date * Call option - right to buyPut option - right to sell Double option - right to buy or sell, combination of call and put