1. Describe Interest Rate Parity (IRP).

2. Compare and contrast forward and futures contracts.

3. Explain how firms can benefit from forecasting exchanges rates.

4. Describe the common techniques used for forecasting exchange rates.

5. Explain the concepts of transaction exposure, economic exposure, and translation exposure. How each of the exposure could be measured?

6. Describe the commonly used techniques to hedge payables and receivables.

7. Suggest other methods of reducing exchange rate risk when hedging techniques are not available.

8. Explain how a firm can hedge its translation exposure and the limitations of hedging translation exposure.