Currency and Foreign Exchanges

This section discusses currency exchange, exchange rates, and how currency exchange rates are determined based on the direct and indirect currency quotes (also known as the US and European terms, respectively). It also discusses spot rates, forward rates, and cross rates. Why might companies use these tools?

What Do We Mean by Currency and Foreign Exchange?

Learning Objectives

  1. Understand what is meant by currency and foreign exchange.
  2. Explore the purpose of the foreign exchange market.
  3. Understand how to determine exchange rates.

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