ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the price of one currency in terms of gold in the domestic market
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the price of one currency in relation to other currencies in the international money market
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the price of domestic currency in relation to foreign currency in the international market
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both (b) & (c)
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Detailed explanation-1: -Foreign Exchange Rate is defined as the price of the domestic currency with respect to another currency. The purpose of foreign exchange is to compare one currency with another for showing their relative values.
Detailed explanation-2: -Foreign exchange is also called forex in short. We have seen what foreign exchange is. We will go through the advantages of foreign exchange. Foreign exchange is required for international trade.
Detailed explanation-3: -Exchange rates have what is called a spot rate, or cash value, which is the current market value. Alternatively, an exchange rate may have a forward value, which is based on expectations for the currency to rise or fall versus its spot price.
Detailed explanation-4: - Provides a measure of relative value against a range of currencies you are interested in. Measuring exchange rates Bi-lateral rates Multi-lateral rates A bilateral rate is the rate of A multilateral rate is the value of a currency exchange of one currency for another, against more than one other currency.
Detailed explanation-5: -Spot Forex Market: The spot market is the immediate exchange of currencies at the current exchange. Forward Forex Market: The forward market involves an agreement between the buyer and seller to exchange currencies at an agreed-upon price at a set date in the future. More items •14-Sept-2022