1. Quoting Currencies Base Currency In a quoted exchange rate, currency that is purchased with another currency Quoted Currency In a quoted exchange rate, currency with which another currency is to be purchased

2. Quoting Currencies % Change = POPO P N — P O X 100 Indirect Quote = 1 Direct Quote Direct Quote = 1 Indirect Quote

3. Spot Rates The Spot Market Buy and Sell Rates

4. The Forward Market Forward Rates Forward Contracts Premiums and Discounts

5. Swaps, Options, and Futures Currency Swaps Currency Options Currency Futures Contracts

6. Deregulation of Markets Innovations in Technology Growth of the Foreign Exchange Market

7. Foreign Exchange Market Institutions Interbank Market Clearing Mechanisms Securities Exchanges Over-the-Counter Market