Nowadays, network security plays a major role in the field of wireless communications. Wired networks propagate electrical signals or pulses through cables. Whereas wireless signals propagate through the air. If wireless networks are left open and exposed to the outside world, there are high chances of being misused by others. The intruders take advantage of this, to intercept the wireless signals. This is the reason why an extra level of security is required for wireless networks. The physical layer is one of the important layers of the Open System Interconnection (OSI) model which plays an important role in the network’s physical connections like wireless transmission, cabling, connections etc. The physical layer supports the bit-level transmission between various devices by connecting to the physical medium for synchronized communication.In this thesis, a method is studied for exchanging secret key [1] bits using a pseudo-random sequence generator based on Frequency Division Duplex (FDD) systems. The principle of this method is to generate a secret key in a manner that produces low correlation at the intruder. By uniquely relating the secret key bits to the channel in a private version of the universal codebook, a robust key exchange between the transmitter and the receiver is then performed.