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Chapter Outline
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Foreign Exchange Markets and Risk: Chapter Overview

Background and History of Foreign Exchange Markets

Foreign Exchange Rates and Transactions
Foreign Exchange Rates

Foreign Exchange Transactions

Return and Risk of Foreign Exchange Transactions

Role of Financial Institutions in Foreign Exchange Transactions
Interaction of Interest Rates, Inflation, and Exchange Rates
Purchasing Power Parity

Interest Rate Parity
Appendix 9A: Balance of Payment Accounts (at www.mhhe.com/sc4e)






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