Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Copyright © 2007 Pearson Addison-Wesley. All rights reserved.
Chapter 6
The Foreign
Copyright © 2007 Pearson Addison-Wesley. All rights reserved. 1-2
The Foreign Exchange Market
•
The
Foreign Exchange Market
provides:
– the physical and institutional structure
through which the money of one country is exchanged for that of another country;
– the determination rate of exchange between
currencies, and
– is where foreign exchange transactions are
Copyright © 2007 Pearson Addison-Wesley. All rights reserved. 1-3
The Foreign Exchange Market
• Foreign exchange means the money of a foreign country; that is, foreign currency bank balances, banknotes, checks and
drafts.
• A foreign exchange transaction is an
agreement between a buyer and a seller that a fixed amount of one currency will be