ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Exchange rate
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Conversion rate
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Interest rate
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None of the above
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Detailed explanation-1: -An exchange rate is a rate at which one currency will be exchanged for another currency. While most exchange rates are floating and will rise or fall based on the supply and demand in the market, some exchange rates are pegged or fixed to the value of a specific country’s currency.
Detailed explanation-2: -An exchange rate is a relative price of one currency expressed in terms of another currency (or group of currencies). For economies like Australia that actively engage in international trade, the exchange rate is an important economic variable.
Detailed explanation-3: -“Exchange rate” refers to how much of one currency you can trade for a different currency. For example, you could trade about 1 USD for 0.83 EUR. Or in other words, 1 EUR is equal to about 1.21 USD.