Questions:

1-Explain, Determination of exchange rates: price (law of one price, PPP), inflation, interest rate (short-run vs. long-run), market psychology, other determinants such as political stability, public debt, economic performance?

2-Describe tools to protect against foreign exchange risks: hedging (spot rates, forward, currency swaps, options, carry trade, arbitrage), natural hedge?

3-Can we forecast foreign exchange rates: efficient vs. inefficient market school, fundamental/technical/judgmental forecasts?