Describe the functions of the foreign exchange market. Understand what is meant

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 explain the implications for management practice.

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The purpose of this interactive activity is to demonstrate your understanding of the concepts learned lessons by responding to discussion questions.

Test your Knowledge (Question):
Discuss the functions of the foreign exchange market.