#### Learning Outcome Statements

My Note:

1. The Foreign Exchange Market *a. define an exchange rate and distinguish between nominal and real exchange rates and spot and forward exchange rates;*
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b. describe functions of and participants in the foreign exchange market;*
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2. Exchange Rate Quotations *c. calculate and interpret the percentage change in a currency relative to another currency;*
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3. Cross-Rate Calculations *d. calculate and interpret currency cross-rates;*
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4. Forward Calculations *e. convert forward quotations expressed on a points basis or in percentage terms into an outright forward quotation;*
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f. explain the arbitrage relationship between spot rates, forward rates, and interest rates;*
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g. calculate and interpret a forward discount or premium;*
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h. calculate and interpret the forward rate consistent with the spot rate and the interest rate in each currency;*
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5. Exchange Rate Regimes *i. describe exchange rate regimes;*
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6. Exchange Rates, International Trade, and Capital Flows *j. explain the effects of exchange rates on countries' international trade and capital flows.*
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