Cash

This chapter discusses the role of cash in investment industry. Cash is both an investment class in its own right and the means of exchange that is used to pay for investments in the other asset classes such as securities and derivatives. Investment industry participants use cash as an investment class in two ways: foreign exchange transactions and money market loans and deposits. The foreign exchange (FX) market exists wherever one currency is traded for another and it is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. Foreign exchange transactions include spot transactions and forward transactions.