Explain the Forces That Can Cause an Exchange Rate to Change

question 102

Essay

Explain the forces that can cause an exchange rate to change.

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Definitions:

Profitability Ratio

A financial metric used to evaluate a company's ability to generate income relative to its revenue, operating costs, balance sheet assets, or shareholders' equity.

Budget

An estimate of income and expenditure for a set period of time, often used for planning and managing finances.

Operating Budget

An estimation of the revenue and expenses over a specified future period of time, operationalizing a company's financial plan.

Debt Ratio

A financial ratio that measures the extent of a company's or individual's leverage, calculated by dividing total liabilities by total assets.