 | Learning Objectives
(See related pages)
- Describe the functions of the foreign exchange market.
- Understand what is meant by spot exchange rates.
- Recognize the role that forward exchange rates play in insuring against foreign exchange risk.
- Understand the different theories explaining how currency exchange rates are determined and their relative merits.
- Identify the merits of different approaches toward exchange rate forecasting.
- Compare and contrast the differences among translation, transaction, and economic exposure, and what managers can do to manage each type of exposure.
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