Question 4 There are two main functions of foreign exchange market; to convert the currency of one country into the currency of another, and to provide some insurance against foreign exchange risk. a....

Question 4 There are two main functions of foreign exchange market; to convert the currency of one country into the currency of another, and to provide some insurance against foreign exchange risk. a. Define foreign exchange risk and explain the differences between spot exchange rates, forward exchange rates, and currency swap in order to insure against foreign exchange risk.