Distinguish between a spot foreign exchange transaction and a forward foreign exchange transaction. Calculate return and risk on foreign exchange transactions. Describe the role of financial institutions in foreign exchange transactions.

Business Question

1. Understand what foreign exchange markets and foreign exchange rates are.
   
2. Identify the world’s largest foreign exchange markets.
   
3. Know what the euro is and how/why it was created.
   
4. Distinguish between a spot foreign exchange transaction and a forward foreign exchange transaction.
   
5. Calculate return and risk on foreign exchange transactions.
   
6. Describe the role of financial institutions in foreign exchange transactions.
   
7. Identify the relations among interest rates, inflation, and exchange rates.