Financial exchange markets are institutions that have a unique place in the system of market economy and are rightly considered to be the main pillars of the financial markets. Especially thanks to its functional and social status. The recent development of information and communication technologies has been significantly changing the exchange market systems. This thesis deals with the exchange market's system. In the theoretical part of the paper is the main attention paid to the decomposition of the whole complex into subsystems and characteristics of its individual components, in particular trading and information subsystem within the structure of the exchange market. The practical part is devoted to research the presence of tacit knowledge and its impact on trading.

The topic of work "Investor's psychology on Foreign Exchange market" is to explain basic assumption for business on the Foreign Exchange markets and also methods how to profit on them. Work focus on soft factors, which are important in investor's decisions making process. These factors are typical for human's decisions, which are not always optimal from statistical and logical side, and may cause mistakes and investor's lost. The most important economic theories of client's behavior are used for conclusions. The major part of work foces on client as individual, describes his motivation, expectation, trade joining and risk adaptation. Theoretical data are participants of the research, which is based in two decision's making games. Conclutions are created from results of games and their comparison.

The results of this thesis suggest that investors should invest in portfolios consisting of the Standard and Poor's 500, the Ten Composite Index and the ten founding stock exchanges, rather than only invest in either the ten founding stock exchanges or Standard and Poor's 500.

The object of master's thesis is to introduce to the financial derivatives and principals of trading on financial markets. We describe the methods used to search for arbitrage opportunities through statistical indicators and statistical characteristics, which are an integral part of the automatized trading systems. Analysis of the financial market is based on data derived from the interbank market.

This paper studies factors that influence the stock return on the Shanghai Stock Exchange (SSE) market. To achieve this goal, a stock-fixed effects model is estimated using a panel data sample comprising 100 companies listed on the SSE market during the 72-month period from January 2002 to December 2007. I find that number of trades and book-to-market value in both up and down markets have a significant and positive impact on stock returns during the studied period, whereas stock returns were negatively affected by systematic risk in both up and down markets although less so in up markets. Price to earnings ratio did not show any significant effect on stock returns on the SSE. My overall results indicate that SSE did not satisfy the efficient market hypothesis 1 during the studied period from January 2002 to December 2007.

Financial data is often said to follow different market regimes. These regimes, which not possible to observe directly, are assumed to influence the observable returns. In this thesis such regimes are modeled using hidden Markov models. We will investigate whether the five different currency pairs EUR/NOK, USD/NOK, EUR/USD, EUR/SEK, and USD/SEK exhibit market regimes that can be described using hidden Markov modeling. We will find the most optimal number of states and study the mean, variance, and correlations in each market regime. / Finansiella data sägs ofta följa olika marknadsregimer. Dessa marknadsregimer kan inte observeras direkt men antas ha inflytande på de observerade avkastningarna. I denna uppsats undersöks om de fem valutaparen EUR/NOK, USD/NOK, EUR/USD, EUR/SEK och USD/SEK tycks följa separata marknadsregimer som kan detekteras med hjälp av en dold Markovkedja.

This dissertation consists of three essays, each examining distinct dimensions of cross-sectional variation in exchange rate changes and currency returns conditional on macroeconomic variables. Chapter 2: Protectionism, Bilateral Integration, and the Cross-Section of Ex-change Rate Returns in US Presidential Debates We study the impact of US presidential election TV debates on intraday exchange rates of 96 currencies from 1996 to 2016. Expectations about protectionist measures are the main transmission channel of debate outcomes. Currencies of countries with high levels of bilateral foreign trade with the US depreciate if the election probability of the protectionist candidate increases during the debate. We rationalize our results in a model where a debate victory of a protectionist candidate raises expectations about future tariffs and reduces future net exports to the US, resulting in relative depreciation of currencies with high bilateral trade integration. Chapter 3: Global Portfolio Network and Currency Risk Premia External portfolio investments of countries can explain cross-sectional variation in currency risk premia. Using bilateral portfolio holdings of 26 countries from 2001 to 2021, I construct a network centrality measure where a country is central if it is integrated with key countries that account for a large share in the supply of tradeable financial assets. I find that currency excess returns and interest rates decrease in network centrality. The network centralities are persistent over time and offer a country-specific economic source of risk that are able to explain robust differences in currency risk premia. Empirical asset pricing tests show that the derived risk factor is priced in a cross-section of currency portfolios. Further, negative global shocks cause currencies of central countries to appreciate, while currencies of peripheral countries depreciate. I discuss the findings with implications of a consumption-based capital asset pricing model where central countries have lower consumption growth in high marginal utility states, resulting in an appreciation of their currencies. Chapter 4: FX Dealer Constraints and External Imbalances We study the impact of FX dealer banks' financial health on the cross-sectional variation of exchange rates. Using individual balance sheet information of 39 dealers, we derive an intermediary constraints index that captures the risk-bearing capacity of intermediaries. A deterioration of the solvency of dealer banks impairs their risk-bearing capacity and increases their marginal value of wealth. We test the theoretical prediction of Gabaix and Maggiori (2015) that tightening financial constraints of intermediaries are associated with increasing currency risk premia in the cross-section of the riskiness of currencies, as measured by the net foreign assets of countries. We combine dealer-specific risks to macroeconomic fundamentals of a cross-section of currencies, i.e., the indebtedness to foreigners measured by countries' net foreign assets. We show that currency excess returns increase with a country's external imbalances when constraints are relaxed, but debtor currencies experience a depreciation when constraints tighten.

The revolutionisation of international economies and monetary systems has been taking place since the early 1970s. This occurred due to the diminishing fixed exchange rate systems of, initially, the Gold Standard and subsequently the Bretton Woods System. The collapse of these systems, especially the Bretton Woods System, led to the almost free movement of exchange rates. The lack of restriction placed on the movement of currencies created volatile markets; which, in turn, gave rise to an innumerable amount of risks. In Correia, Holman and Jahreskog (2012) it was determined that an astonishing 74% of non-financial firms in South Africa hedge foreign exchange risk (the risk of currency movement). The 10% of firms which did not hedge any risks declared it was due to the lack of exposure to foreign exchange risks and that the cost of acquiring a hedging contract, in many cases, exceeded the contract’s benefits. In the aforementioned study it was also established that the extractive sector of South Africa is one of the industries referring from the use of hedges. The intention of this study is to improve the effectiveness of derivative instruments for companies in the extractive sector of South Africa exporting to the United States of America. South Africa is a large exporter and importer of goods, making it extremely important for market participants to determine the movement of the exchange rates. This estimates the amount of risk a company is willing to take and the amount of hedges they will use to protect themselves against inauspicious and adverse movements in the markets. Therefore, incorporated in this study is the use of risk management tools from the technical analysis to predict the exchange rates at which companies should have set their hedging contracts on specific dates. This analysis could enable companies to perform an internal control that is inexpensive and which reduces risks of foreign exporting. / MCom (Management Accountancy), North-West University, Potchefstroom Campus, 2014

The revolutionisation of international economies and monetary systems has been taking place since the early 1970s. This occurred due to the diminishing fixed exchange rate systems of, initially, the Gold Standard and subsequently the Bretton Woods System. The collapse of these systems, especially the Bretton Woods System, led to the almost free movement of exchange rates. The lack of restriction placed on the movement of currencies created volatile markets; which, in turn, gave rise to an innumerable amount of risks. In Correia, Holman and Jahreskog (2012) it was determined that an astonishing 74% of non-financial firms in South Africa hedge foreign exchange risk (the risk of currency movement). The 10% of firms which did not hedge any risks declared it was due to the lack of exposure to foreign exchange risks and that the cost of acquiring a hedging contract, in many cases, exceeded the contract’s benefits. In the aforementioned study it was also established that the extractive sector of South Africa is one of the industries referring from the use of hedges. The intention of this study is to improve the effectiveness of derivative instruments for companies in the extractive sector of South Africa exporting to the United States of America. South Africa is a large exporter and importer of goods, making it extremely important for market participants to determine the movement of the exchange rates. This estimates the amount of risk a company is willing to take and the amount of hedges they will use to protect themselves against inauspicious and adverse movements in the markets. Therefore, incorporated in this study is the use of risk management tools from the technical analysis to predict the exchange rates at which companies should have set their hedging contracts on specific dates. This analysis could enable companies to perform an internal control that is inexpensive and which reduces risks of foreign exporting. / MCom (Management Accountancy), North-West University, Potchefstroom Campus, 2014

My diploma thesis discusses the power and importance of money management when trading foreign exchange market. With the help of real examples it aims to demonstrate the difficulty of the future foreign exchange rate estimation and the ambiguousness of the market analyses results. Comparing the results of real trading in the spirit of diversification to the actual results of Vince's model, the thesis points out whether the application of diversification is a real necessity or not. The thesis also highlights the impact of diversification on the trading system performance compared to Vince's model. The final part proposes a possible practical accounting solution to the foreign exchange speculative trades.