- CFA Exams
- Dec. 2020 Level 1
- Study Session 5. Economics II
- Reading 18. Currency Exchange Rates

### Reading 18. Currency Exchange Rates

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### Learning Outcome Statements

Reading 18. Currency Exchange Rates | |
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1. The Foreign Exchange Marketa. define an exchange rate and distinguish between nominal and real exchange rates and spot and forward exchange rates;
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2. Exchange Rate Quotationsc. calculate and interpret the percentage change in a currency relative to another currency; | |

3. Cross-Rate Calculationsd. calculate and interpret currency cross-rates; | |

4. Forward Calculationse. convert forward quotations expressed on a points basis or in percentage terms into an outright forward quotation;f. explain the arbitrage relationship between spot rates, forward rates, and interest rates; g. calculate and interpret a forward discount or premium;
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5. Exchange Rate Regimesi. describe exchange rate regimes; | |

6. Exchange Rates, International Trade, and Capital Flowsj. explain the effects of exchange rates on countries' international trade and capital flows. |