learning goals understand the meaning and functions of the foreign exchange market know what the spot forward cross and effective exchange rates are understand the meaning of foreign exchange risks ...
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...Learning goals understand the meaning and functions of foreign exchange market know what spot forward cross effective rates are risks hedging speculation interest arbitrage salvatore international economics th edition john wiley sons inc introduction where individuals firms banks buy sell currencies or markets transfer purchasing power from one nation currency to another demand for arises when tourists visit country domestic firm wants import other countries individual invest abroad supply tourist expenditures export earnings receiving investments provide credit transactions is needed goods in transit allow buyer time resell make payment facilities about trading reflects purely financial only trade financing participants those needing fund importers exporters investors etc commercial serve as clearinghouses brokers clearinghouse surpluses shortages between central seller last resort...