Instructions

Write a paper about the foreign exchange market that addresses the following:

Discuss the functions of the foreign exchange markets. Identify and appraise the primary institutions and organizations comprising the foreign exchange market.

Explain the roles that each of these primary institutions and organizations.

Describe how foreign exchange rates are quoted. Define the absolute and relative purchasing power parity theories.

Analyze the relationship between interest rates and exchange rates. Describe why these theories and relationships are important for the multinational business manager.

Evaluate what you feel to be the five most important impacts on exchange rates for forecasting the direction of exchange rates. Explain each of these impacts and defend your choices. Describe why these forecasts are important to a multinational business manager.