THE FOREIGNEXCHANGEMARKET
Chapter Overview
Introduction
Organization of the Foreign ExchangeMarket
The Spot Market
The Forward Market
Interest Rate Parity Theory
In
troductio
n
The FOREX market provides the physicaland institutional structure through which themoney of one country is exchanged for thatof another country
A foreign exchange transaction is anagreement between a buyer and a seller thata fixed amount of one currency will bedelivered for some other currency at aspecified rate
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