Which of the Following Is True of International Currencies

question 35

Multiple Choice

Which of the following is true of international currencies?

• A) Exchange rate volatility for international currencies is relatively low.
• B) There is a benchmark currency in the world against which all other currencies are pegged.
• C) All major currencies are free floating relative to one another.
• D) All currencies are fully backed by gold reserves.
• E) The World Bank mandates a fixed exchange rate regime.

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Definitions:

Exchange Rates

The rate at which one currency can be exchanged for another currency.

Capital Assets (Net)

The total value of a business's long-term assets, including property, plant, and equipment, net of accumulated depreciation.

Functional Currency

The main currency used by a business entity to conduct its economic activities and financial reporting.

Acquisition Differential

The difference between the cost of an acquisition and the fair value of the net identifiable assets of the acquired entity.