Discussion
What is meant by the foreign exchange market? Where is it located, and who are its participants?
How does currency arbitrage work to keep a the exchange rate essentially the same in different markets
How are the currency rate determined a free (floating) exchange rate market? Give examples of freely floating currencies and explain why?
Are there any examples of fixed exchange rate systems? Evaluate why they are fixed rates.
What about the Chinese yuan and the Hong Kong dollar - are they fixed rates? If not, what is the currency policy of these countries?