When a Currency Is Allowed to Increase or Decrease Freely

question 17

Multiple Choice

When a currency is allowed to increase or decrease freely according to market forces, the currency is said to:

• A) be pegged to another currency.
• B) be less valuable.
• C) have independent float.
• D) devalue.

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Definitions:

Required Return

Required return is the minimum profit or gain needed from an investment to make it worthwhile, considering the risk involved and the opportunity cost of forgoing other investments.

IRR

The internal rate of return, a metric used to evaluate the profitability of potential investments.

Investment

The act of allocating resources, usually money, with the expectation of earning an income or profit.

Analytical Methods

Techniques or procedures used to systematically analyze substances, financial data, or information to deduce qualitative and/or quantitative insights.