Foreign Exchange Markets

After reading this chapter you should be able to:

Understand the nature of the foreign exchange market with a special focus on emerging markets.

Know the history of financial exchange systems.

Understand the impact of appreciation or depreciation on multinationals.

Appreciate the reasons and impact of government intervention in the foreign exchange market.

Understand what determines exchange rates.

Know how MNCs manage exchange-rate risks.

Be familiar with the nature of foreign exchange arbitrage.