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1. What are foreign exchange markets and foreign exchange rates? Why is an understanding of foreign exchange markets important to financial managers and individual investors? (LG 9-1) 3. A U.S. insurance company invests $1,000,000 in a private placement of British bonds. Each bond pays 300 in interest per year for 20 years. If the current exchange rate is 1.364/$, what is the nature of the insurance company's exchange rate risk? Specifically, what type of exchange rate movement concerns this insurance company? (LG 9- 1 )