Microsoft PowerPoint - MODULE 2, 1 (Compatibility Mode)

International financial
Management
HARISHA.B.V.
AIP(FINANCE AND CONTROL)
IIM BANGALORE
Harisha.B.V.AIP(finance & control)
IIMB
MODULE 2
Module 2
Foreign exchange markets
Functions
Participants
Currency derivatives
interest rate futures
Speculations.
IIMB
Foreign exchange markets

The foreign exchange market is that in which
currencies are bought and sold against each other.
The bulk of this is accounted for a small number
of currencies US dollar,deutsche mark, yen,
pound ,Swiss franc, Canadian dollar,Dutch
guider,Italian lira,Belgian franc,euro.

IIMB
Over the counter market

Foreign exchange market is an over the counter
market.
The market spans all the time zones of the world
and function virtually round the clock,enabling a
trader to offset a position created in one market
using another market.
The major ones are London, New York,
Tokyo,Zurich,Frankfurt,Hong Kong, and
Singapore.
IIMB
Structure of foreign exchange

market
It is made up of
Retail market-travellers and tourists and other
individuals uses this market.the total turnover and
average size are very small.
Wholesale market- this is interbank
market.commercial banks,investment
banks,corporations and central bank participate.the
average transaction and size is very large.
IIMB
Primary price markers and

secondary price makers
Primary price makers or professional dealers make
a two way market to each other and to their
clients.they will give a two way price .They make
the prices.
First tier consists of a giant MNB deal in a large
number currencies in large amounts and often deal
directly with each other without using brokers.
The second tier are large banks who deal in a
smaller number of currencies and use the services
of brokers moreHarisha.B.V.AIP(finance
often. IIMB & control)
Secondary price makers

Secondary price makers are entities which
make foreign exchange prices but do not
make a two way market(RETAIL
MARKET).
Restaurants , hotels, shops catering to
tourists buy foreign currency in payment of
bills.
IIMB
Other important points

The spread between buying and selling prices with
secondary price makers or retail market will be
large when compared to wholesale or primary
price makers.
Foreign exchange brokers act as middle men
between two market makers. The brokers do not
buy or sell on their own account.
IIMB
Role of central banks

Central banks intervene in the market from
time to time to attempt to move exchange
rates in a particular direction.
IIMB
Contribution of volume
Cross border exchanges of goods and services
account for a very small proportion .
The large volume will be from capital account .
As banks usually aim to maintain square or near
square positions, a lot of turnover is simple
attributable to banks offsetting their positions.
IIMB
speculators
There is no distinct class of speculators in
the foreign exchange market.
Price making banks often carry uncovered
positions to profit from exchange rate
movements.
A non financial corporations which does not
hedge its foreign currency export receivable
or import payable is as much a speculator.
IIMB
The mechanics of currency

trading
The international standard organization has developed three letter
codes.
USD-US DOLLAR
GBP-GREAT BRITAIN POUND
JPY-JAPANESE YEN
CHF-SWISS FRANC
SEK-SWEDISH KRONER
CAD-CANADIAN DOLLAR
BEF-BELGIAN FRANC
NLG-DUTCH GUIDER
DEM-DEUTSCHE MARK
SAR-SAUDI RIYAL
IIMB
Inter bank dealing
A typical spot transaction

Monday 21 sep 10.45 a.m.
Bank A: EUR USD please
Bank B: 40-45

IIMB
Bank B is specifying a two way price, it is

quoting last two digits.
The actual price will be 0.8740/0.8745
The last two digits are called points or pips.
Then bank A says mine(willing to buy)
If it wants to sell then it might have said yours
IIMB
Warehousing deal and Back to

Back dealing
When Bank B gives the quote which is
based on information about the current
market it is called as warehousing deal.
When B calls C and gets the quote and then
gives to A .If A does a deal, B will
immediately offset it with C.this is back to
back dealing.
IIMB
Short and long positions
If any bank has sold more then what it has

bought it is said to have a net short position.
If any bank has bought more then what it
has sold it is said to have a net long
position.
IIMB
SWIFT
Society for World wide Interbank Financial
Telecommunication.
This is non profit Belgian co operative with main
and regional centers around the world connected
by data transmission lines.
When bank deals through brokers,they transmit
their buy and sell orders to a broker who shows
them to the market without revealing the identities
of the parties.
IIMB
Types of transactions
The day on which transfers are effected is
called the settlement date or the value date.
The three types of market or transactions
are
Spot
Forward
Swap.( a combination of spot and forward)
IIMB
Value dates or settlement dates

Spot transaction is normally T+2 days.
Forward contract maturities are normally 1 ,
2, 3, 6, 9, 12 months.
Swap transaction
If a bank A purchases USD from Bank B
spot,and simultaneously enter into forward
transaction with the same counter party to
sell USD after 1 month.
IIMB
Outright forward and

forward forward swap
Forward contracts without an
accompanying spot deal are known as
outright forward contracts.
A one month forward purchase of USD
against GBP coupled with three months
Forward sale of USD against GBP is
forward forward swap.
IIMB
Exchange rate quotations and

arbitrage
Quotation will be given either on
European terms(quotes given as number of
units of a currency per US dollar.example
INR 45/ USD
American terms(quotes given as number of
US dollars per unit of currency.example
USD 1.6525/ GBP)
IIMB
Direct and indirect quotes

Direct quotes- it give units of the home
currency per unit of foreign
currency.example INR 45/ USD
Indirect quotes number of units of foreign
currency per unit of the home
currency.example USD 2.051010/ INR 100
IIMB
Bid ask spreads

A bid is the price at which dealer will buy
one currency for another currency.
Ask is the price at which dealer will sell one
currency for another currency
The difference between bid and ask is called
as spread which will the dealers margin.

IIMB
Example
USD/CHF spot: 1.4550/ 1.4560

Dealer will buy at 1.4550
Dealer will sell at 1.4560
Spread = 1.4560-1.4550
Percentage spread =
(1.4560-1.4550)/1.4560* 100
Quotations are generally shortened to 1.4550/60
IIMB
Arbitrage
Arbitrage in finance refers to a set of
transactions, selling and buying or lending
or borrowing the same asset or equivalent
groups of assets ,to profit from price
discrepancies within a market or across
markets.
Equivalent here means having identical cash
flows and risk characteristics.
IIMB
Arbitraging between banks

Though the term market rate is used there is
no one single market rate among all the
banks.
The rate will be close to each other .
Obviously such a situation gives rise to
arbitrage opportunity.

IIMB
Example
Bank A is quoting
GBP/USD 1.4550/1.4560
Bank B is quoting
GBP/USD 1.4538/1.4548
Here there is a possibility of arbitrage
IIMB
Example 2
Bank A
GBP/ USD 1.4550/1.4560
Bank B
GBP/USD 1.4545/1.4555
Here there is no arbitrage possibilities.
What is its implications?
IIMB
Inverse quotes and two point

arbitrage
BANK IN NEW YORK
USD/ AUD 1.8885/90( SPOT )
BANK IN ZURICH
AUD/USD: 0.5275/0.5280(SPOT)
IS THERE ANY ARBITRAGE?
IIMB
CROSS RATES
An exchange rate between two currencies

that is derived from the exchange rates of
those currencies with a third currency is
known as a cross rate.

IIMB
Example
GBP/USD ; 1.6545/1.6552
EUR/USD: 1.3655/1.3665
WHAT IS GBP/EUR?
GBP/EUR bid = (GBP/USD) bid * (USD/EUR)bid
GBP/EUR ask = (GBP/USD) ask * (USD/EUR)ask

IIMB
Triangular Arbitrage
GBP 1 = USD 1.96 IN NEW YORK

GBP 0.2 = 1 DEM IN LONDON
2.5 DEM = USD 1 IN FRANKFURT.

IIMB
COVERED INTEREST RATE

ARBITRAGE
Spot Rate 50 Rs = 1$
Interest rate in India 8%
Interest rate in US is 12.5%
One year forward rate is 48 RS.

IIMB
Golden rule
If the interest rate differential is greater than

the premium or discount. place the money
in the currency that has higher rate of
interest or vice versa.
Interest rate differential = difference
between two countries.
IIMB
Forward premium or discount
(Forward rate spot rate) / spot rate * 100 * 12/N

IIMB
Example
Spot rate RS 42.0010 = $ 1
6 month forward rate : RS 42.8020
Annualized interest rate on 6 month
rupee=12%
Annualized interest rate on 6 month dollar =
8%
Calculate the arbitrage possibilities
assuming 1000 $ as investment.
IIMB
Swap markets exchange rate

determination
A typical swap quotations appears as
follows
USD/CHF SPOT 1.6265/75
1- MONTH SWAP 15/8

IIMB
PROBLEM
USD/INR SPOT 48.75/80

2 MONTH SWAP 12/20
USD/JPY SPOT 125.50/126.10
2 MONTH SWAP 20/15
FIND INR/JPY 2 MONTH OUTRIGHT

IIMB
Derivatives
A derivative is a two party contract whose value is
derived from the value of an underlying asset.
The underlying asset may be Index, stock,
currency, interest rate, commodity.
In finance derivatives means a financial product
which has been derived from a market .
It has no independent existence.

IIMB
Types of derivatives
Futures (Forwards)
Options
Swaps ?

IIMB
Derivatives products
MARKET
USED
CREATED PRODUCTS
FOR HEDGING THE PRICE VARIATION RISK
Often investors split the risk of underlying position into

several components and manage the risk which they dont
want to have through derivatives
TWO
TYPES OF DERIVATIVE PRODUCTS
PRODUCTS WHICH ENSURE A FIXED PRICE

(FUTURES)
PRODUCTS WHICH ELIMINATES DOWNSIDE RISK
OF THE PRICE (OPTIONS)
DERIVATIVE
PRODUCTS EXIST ON BOTH

COMMODITY AND FINANCIAL
PRODUCTS
IIMB
Exchange-traded futures and options

standardized products
trading floor or computerized trading
virtually no credit risk
Over-the-Counter forwards, options, & swaps

often non-standard (customized) products
telephone (dealer) market
some credit risk

IIMB
Uses of Derivatives
To hedge or insure risks; i.e., shift risk.
To reflect a view on the future direction of the
market, i.e., to speculate.

To lock in an arbitrage profit
To change the nature of an asset or liability.
To change the nature of an investment without
incurring the costs of selling one portfolio and
buying another.
IIMB
Currency future
At a glance a currency future like a forward
contract is a contract for future delivery.
A currency future is the price of a particular
currency for settlement at a specified future date.
The two popular future exchanges are the
Singapore international Monetary Exchange
(SIMEX) and International Money Market
(Chicago, IMM).
IIMB
PRODUCTS TRADED IN FUTURES EXCHANGES

(FINANCIAL PRODUCTS)
CURRENCY:
AUSTRALIAN DOLLAR, POUND,

DEUTSCHEMARK, FINNISH CURRENCY, FRENCH
FRANC, JAPANESE YEN, NZ DOLLAR, SWISS FRANC,
CROSS-CURRENCY RATE, CURRENCY INDEX
INTEREST
RATE: T.BILL, BONDS, EURODOLLAR,

BOND INDICES
STOCK
INDEX & EQUITY CONTRACTS
MISCELLANEOUS
PRODUCTS

IIMB
Features of futures contract

Futures are traded on organized exchanges.
Clearing house
Futures are traded through brokers.
The contracts are standardized.
margins
Marking to market
Actual delivery is rare
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System of Margins
Initial margin : When position is opened
Variation Margin: Settlement of daily gains and losses
Maintenance Margin : Minimum balance in margin account.
Balance falls below this, margin call issued. If not met,
position liquidated.
Regulators specify minimum margins between clearing
members and clearinghouse. Margins at other levels
negotiated
Margins can be deposited in cash or specified securities such
as T-bills. Interest on securities continues to accrue to owner.
Margin is a performance bond.
Levels of margins may be changed if volatility increases.
IIMB
System of Margins
With clearing house guarantee, buyer-seller need not
worry about each others creditworthiness.
Standardized contracts with margin system increase
liquidity.
Protects clearing house; enhances financial

integrity of the exchange. Credit risk issues
almost eliminated

IIMB
Futures and Forwards: A Comparison Table

Futures
Default Risk:
Forwards
Borne by Clearinghouse
Borne by Counter-Parties
Standardized
Negotiable
Agreed on at Time
of Trade Then,
Marked-to-Market
Agreed on at Time
of Trade. Payment at
Contract Termination
Where to Trade:
Standardized
Negotiable
When to Trade:
Standardized
Negotiable
Clearinghouse Makes it
Easy to Exit Commitment
Cannot Exit as Easily:

Must Make an Entire
New Contrtact
How Much to Trade:
Standardized
Negotiable
What Type to Trade:
Standardized
Negotiable
Required
Collateral is negotiable
What to Trade:
The Forward/Futures
Price
Liquidity Risk:
Margin
Typical Holding Pd.
Harisha.B.V.AIP(finance
& control) Delivery takes place
Offset
prior to delivery
IIMB
Theoretical Futures Price

Let C denote the present value of carrying costs, St the
spot price, r the interest rate, and FUt,T the futures price
for delivery at T, Then theoretical futures price is given
by
FUt,T = (St + C)[1 + r(T-t)]

IIMB
Futures and Forwards on

Currencies
A foreign currency is
analogous to a security
providing a dividend yield
The continuous dividend
yield is the foreign riskfree interest rate
It follows that if rf is the
foreign risk-free interest
rate
0
0
F =Se
(rrf )T
F0 =Se
0
( r rf ) T

IIMB
In practice futures price does not exactly equal

theoretical futures price. Reasons:
1 Transaction costs bid-offer spreads, brokerage
2 In some cases, restrictions on short sales (Does not
apply to currency futures)
3 Non-constant interest rates
4 Mark-to-market gains/losses.
IIMB
Hedging Fundamentals
Hedging with futures/forwards typically involves taking a position in a futures
market that is opposite the position already held in a cash market.
A Short (or selling) Hedge: Occurs when a firm holds a long cash position and
then sells futures/forward contracts for protection against downward price exposure
in the cash market.
A Long (or buying) Hedge: Occurs when a firm holds a short cash position and
then buys futures/forward contracts for protection against upward price exposure in
the cash market. Also known as an anticipatory hedge.
A Cross Hedge: Occurs when the asset underlying the futures/forward contract
differs from the product in the cash position.
Firms can hold long and shortHarisha.B.V.AIP(finance
hedges simultaneously
(but for different price risks).
& control)
IIMB
Options Terminology
The two parties to an option contract are the
option buyer and the option seller also called
option writer
Call Option: A call option gives the option
buyer the right to purchase a currency Y against
a currency X at a stated price Y/X, on or before
a stated date.
Put Option: A put option gives the option buyer
the right to sell a currency Y against a currency
X at a specified price on or before a specified
date
IIMB
Options Contracts: Preliminaries

An option gives the holder the right, but not the obligation,
to buy or sell a given quantity of an asset in the future, at
prices agreed upon today.
Calls vs. Puts
Call options gives the holder the right, but not the
obligation, to buy a given quantity of some asset at some
time in the future, at prices agreed upon today.
Put options gives the holder the right, but not the
obligation, to sell a given quantity of some asset at some
time in the future, at prices agreed upon today.
IIMB
Options Terminology
A call option is said to be at-the-money if

Current Spot Price (St ) = Strike Price (X),
in-the-money if St > X and out-of-the-money if
St < X
A put option is said to be at-the-money if
St = X, in-the-money if St < X and out-of-themoney if St > X
In the money options have positive intrinsic
value; at-the-money and out-of-the money
options have zero intrinsic value.
IIMB
Options Contracts: Preliminaries

European vs. American options
European options can only be exercised on the
expiration date.
American options can be exercised at any time up
to and including the expiration date.
Since this option to exercise early generally has
value, American options are usually worth more
than European options, other things equal.
IIMB
A CALL OPTION
A trader buys a call option on US dollar with a strike price of
Rs.46.50 and pays a premium of Rs.1.50. The current spot rate, St,
is Rs.45.50. His gain/loss at time T when the option expires
depends upon the value of the spot rate, ST, at that time :
ST
Gain(+)/Loss(-)
44.5000
-Rs.1.50
45.0000
-Rs.1.50
45.5000
-Rs.1.50
46.0000
-Rs.1.50
46.5000
-Rs.1.50
47.0000
-Rs.1.00
47.5000
-Rs.0.50
48.0000
Rs.0.00
48.5000
+Rs.0.50
49.0000
+Rs.1.00
49.5000
+Rs.1.50
IIMB
PUT OPTION
A trader buys a put option on pound sterling at a strike price of
$1.7500, for a premium of $0.07 per sterling. The spot rate at the
time is $1.7465. At expiry, his gains/losses are as follows :
ST
1.6000
1.6300
1.6500
1.6600
1.6800
1.6900
1.7300
1.7500
1.7700
1.8000
Gain(+)/Loss(-)
+$0.0800
+$0.0500
+$0.0300
+$0.0200
$0.0000
-$0.0100
-$0.0500
-$0.0700
-$0.0700
-$0.0700
IIMB
Option Payoff
LONG CALL
LONG PUT
SHORT
CALL
SHORT PUT

IIMB
The BSOPM Formula

c = S 0 N ( d 1 ) K e rT N ( d 2 )
p = K e rT N ( d 2 ) S 0 N ( d 1 )
ln( S 0 / K ) + ( r + 2 / 2 )T
where d 1 =
T
ln( S 0 / K ) + ( r 2 / 2 )T
d2 =
= d1 T
T
where N(di) = the cumulative standard normal distribution
function, evaluated atHarisha.B.V.AIP(finance
di, and:
& control)
IIMB
Black scholes
C = S N(d1) - E e -rt N(d2)
C = CALL VALUE
r = RISK-FREE RATE
S = CURRENT MARKET PRICE
t = TIME TO EXPIRATION
E = EXERCISE PRICE
N(d) = Cumulative normal probability density function
d1 = {ln(S/E) + (r + 0.5 VAR) t} / {SD * SQRT(t)}
d2 = d1 - {SD * SQRT(t)}
IIMB
Computing Volatility
Find the daily return of the stock over a period
Rt = ln(Pt/Pt-1)
Find the Standard Deviation of daily returns as computed in

the above step
This is standard deviation of daily return
To annualise the standard deviation of daily return,
SD (daily return) * SQRT(250)
where 250 refers to number of trading days in a year.

IIMB
Formulas for Currency Options

c = S 0e
rf T
p = Ke
rT
N ( d 1 ) Ke
rT
N ( d 2 ) S 0e
N (d 2 )
rf T
N ( d1 )
ln( S 0 / K ) + ( r r + 2 / 2 )T
f
where d 1 =
T
2
ln( S 0 / K ) + ( r r / 2 )T
f
d2 =
T
IIMB
Alternative Formulas
Using
c = e
F0 = S 0 e
rT
(r rf )T
[ F 0 N ( d 1 ) KN ( d 2 )]
p = e rT [ KN ( d 2 ) F 0 N ( d 1 )]
2
d1
ln( F 0 / K ) + T / 2
=
T
= d1

IIMB
Elementary Option Strategies

Spread Strategies
Bullish Call Spread: Consists of selling the call with the higher
strike price and buying the call with the lower strike price
Bearish Call spread: If the investor expects the foreign currency
to depreciate, he can adopt the reverse strategy viz. buy the
higher strike call and sell the lower strike call
Bullish Put Spread: Consists of selling puts with higher strike
and buying puts with lower strike
Bearish Put Spread: Opposite of Bullish Put Spread
These strategies, involving options with same maturity but
different strike prices are called vertical or price spreads
IIMB
Bull Spread Using Calls
Profit
ST
K1
K2

IIMB
Bull Spread Using Puts
Profit
K1
K2

IIMB
ST
Butterfly Spreads
This is an extension of the idea of vertical spreads. Suppose
the current spot rate NZD/USD is 0.6000. The call options with
same expiry date are available :
Strike
Premium
0.58
0.07
0.62
0.03
0.66
0.01
A butterfly spread is bought by buying two calls with the

middle strike price of 0.62, and writing one call each with strike
prices on either side, here, 0.58 and 0.66. The profit table is as
below :
IIMB
Butterfly Spread Using Calls
Profit
K1
K2
K3

IIMB
ST
Butterfly Spread Using Puts
Profit
K1
K2
K3

IIMB
ST
Elementary Option Strategies

Straddles and Strangles Volatility Bets
A long straddle consists of buying a call and a put
both with identical strikes and maturity. Usually both
are at-the-money.
A long strangle consists of buying an out-of-themoney call and an out-of-the-money put
Both are bets that the underlying price is going to
make a strong move up or down I.e. market is going
to be more volatile.
IIMB
Delta
Delta
(D) is the rate of change of the option price with

respect to the underlying
Theta
Theta () of a derivative (or portfolio of
derivatives) is the rate of change of the value with
respect to the passage of time
The theta of a call or put is usually negative. This
means that, if time passes with the price of the
underlying asset and its volatility remaining the
same, the value of the option declines
Gamma
Gamma () is the rate of change of delta ()
with respect to the price of the underlying
asset
Gamma is greatest for options that are close
to the money

IIMB
Vega
Vega () is the rate of change of the value
of a derivatives portfolio with respect to
volatility
Vega tends to be greatest for options that
are close to the money

IIMB
Rho
Rho is the rate of change of the
value of a derivative with respect to
the interest rate
For currency options there are 2
rhos

IIMB
Forward Rate Agreements (FRAs)

A FRA is a forward contract on an interest rate (not on a
bond, or a loan).
The buyer of a FRA profits from an increase in interest
rates. The seller of a FRA profits from a decline in rates.
The buyer effectively has agreed to borrow an amount of
money in the future at the stated forward (contract) rate. The
seller has effectively locked in a lending rate.
FRAs are cash settled.
IIMB
Forward Rate Agreements (FRAs)

Only the difference in interest rates is paid. The principal
is not exchanged.
FRAs are cash settled.

IIMB
An Example of an FRA
A firm sells a 5X8 FRA, with a NP of $300MM, and a
contract rate of 5.8% (3-mo. forward LIBOR).
On the settlement date (five months hence), 3 mo.
spot LIBOR is 5.1%.
There are 91 days in the contract period (8-5=3
months), and a year is defined to be 360 days.
Five months hence, the firm receives:
IIMB
Source- debousfky
FRA Example (continued)

$524,077.11, which is calculated as:
(300,000,000)(0.058-0.051)(91/360)
(300,000,000)(0.058-0.051)(91/360)
(300,000,000)(0.058-0.051)(91/360)
1+[(0.051)(91/360)]
300000000*(.058-.051)(91/360)
1+[(0.051)(91/360)]
1+[(0.051)(91/360)]
1+(.051*91/360)

IIMB

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International financial

Foreign exchange markets

Harisha.B.V.AIP(finance & control)

Over the counter market

Structure of foreign exchange

Primary price markers and

Secondary price makers

Other important points

Role of central banks

The mechanics of currency

Inter bank dealing

A typical spot transaction

Harisha.B.V.AIP(finance & control)

Bank B is specifying a two way price, it is

Warehousing deal and Back to

Short and long positions

If any bank has sold more then what it has

Value dates or settlement dates

Outright forward and

Exchange rate quotations and

Direct and indirect quotes

Bid ask spreads

Harisha.B.V.AIP(finance & control)

USD/CHF spot: 1.4550/ 1.4560

Arbitraging between banks

Harisha.B.V.AIP(finance & control)

Inverse quotes and two point

An exchange rate between two currencies

Harisha.B.V.AIP(finance & control)

Harisha.B.V.AIP(finance & control)

GBP 1 = USD 1.96 IN NEW YORK

Harisha.B.V.AIP(finance & control)

COVERED INTEREST RATE

Harisha.B.V.AIP(finance & control)

If the interest rate differential is greater than

Forward premium or discount

(Forward rate spot rate) / spot rate * 100 * 12/N

Harisha.B.V.AIP(finance & control)

Swap markets exchange rate

Harisha.B.V.AIP(finance & control)

USD/INR SPOT 48.75/80

Harisha.B.V.AIP(finance & control)

Harisha.B.V.AIP(finance & control)

Harisha.B.V.AIP(finance & control)

FOR HEDGING THE PRICE VARIATION RISK

Often investors split the risk of underlying position into

TYPES OF DERIVATIVE PRODUCTS

PRODUCTS WHICH ENSURE A FIXED PRICE

PRODUCTS EXIST ON BOTH

Exchange-traded futures and options

Over-the-Counter forwards, options, & swaps

Harisha.B.V.AIP(finance & control)

market, i.e., to speculate.

PRODUCTS TRADED IN FUTURES EXCHANGES

AUSTRALIAN DOLLAR, POUND,

RATE: T.BILL, BONDS, EURODOLLAR,

INDEX & EQUITY CONTRACTS

Harisha.B.V.AIP(finance & control)

Features of futures contract

Protects clearing house; enhances financial

Harisha.B.V.AIP(finance & control)

Futures and Forwards: A Comparison Table

Cannot Exit as Easily: