Introduction:

You and your colleagues are a multi-disciplinary team working in the research department of a large investment company in Toronto. Investor and corporate clients of the company are increasingly asking about the cost of foreign exchange charged by financial institutions.

Scope of Project:

Canada: select one of the major banks, also a virtual bank operating in Canada such as xe.com, plus two other major foreign-based banks to be selected by team members.

Chosen the banks:

Major bank: TD

Virtual bank: Tangerine

Two other major foreign-based banks: Citi bank & HSBC

Question:

1. Describe all risks for both parties and describe what risks are being mitigated through foreign exchange
2. Make a recommendation to corporate clients as to what their likely current foreign exchange fees are for foreign exchange transactions where on a weekly basis $1 million Canadian is being converted into the following currencies: US$, British pound, plus two other currencies to be selected by the team