Slide MGT411 Slide03

Chapter 6
The Foreign
Exchange Market

Copyright © 2007 Pearson Addison-Wesley. All rights reserved.

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
physically completed.
Copyright © 2007 Pearson Addison-Wesley. All rights reserved.

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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
delivered for some other currency at a
specified date.
Copyright © 2007 Pearson Addison-Wesley. All rights reserved.

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