1. The process of international settlement
A Nation`s National Bank B Nation`s National Bank
A Nation`s Local Bank B Nation`s Local Bank
A Nation`s Import Company B Nation`s Export company

2. The structure of foreign exchange market
Interbank market
Central bank
Broker
Bank
Firm, public, government, etc

3. Calculation of Spot rates
Condition:
GBP/USD /10;
USD/EUR /30;
USD/JPY /75
Problem 1: What is the buying rates between USD/EUR
0.9120
Problem 2: What is the selling rates between USD/JPY
121.75
Problem 3:A firm would have EUR against 100 million GDP, how much can the firm get
* * 100M = *100M EUR.
Problem 4: how much can the firm get JPY against 100M EUR
121.45/ *100m = * 100M EUO