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Outline Darwin's three observations and two deductions.
Uncovered Interest Parity
A financial theory that posits that the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.
Exchange Rate Risk
The potential for losses due to fluctuation in the exchange rate between two currencies in international transactions.
Foreign Exchange Market
A global marketplace for trading currencies against each other, determining the exchange rate values between different currencies.
Currency Speculators
Investors who buy and sell foreign exchange with the aim of making a profit from changes in exchange rates, influencing currency values and economic conditions.
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