CHAPTER 1

The Foreign Exchange Market: Structure and Operations

CHAPTER OBJECTIVES

After studying this chapter, you should be able to:

  1. Gain insight into developments in the world economy that have influenced the foreign exchange market.
  2. Delve into the nature and functions of the foreign exchange market.
  3. Understand the dynamics of foreign exchange rates.
  4. Gain knowledge in the trading mechanism in the foreign exchange market.
  5. Understand the implications of cross rates.
  6. Explain the process of arbitraging.
  7. Explain the concept of foreign exchange swaps.
  8. Understand the relationship between forward rates and future spot rates.
  9. Know the major communication networks for foreign exchange transactions.
  10. Gain an overview of the foreign exchange ...

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