What Is a "Foreign Exchange Rate

question 48

Multiple Choice

What is a "foreign exchange rate?"

• A) The price to buy a foreign currency
• B) The price to buy foreign goods
• C) The difference between the price of goods in a foreign currency and the price in a domestic currency
• D) The cost to hold all monetary assets in a single currency

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Definitions:

Spot Rate

The current market price at which a particular asset, such as currency or commodity, can be bought or sold for immediate delivery.

Discount

A reduction applied to the regular price of goods or services or the amount by which the present value of future cash flows is reduced for discounting purposes.

Foreign Currency

Currency used in a country other than one’s own, representing a medium of exchange for goods and services in that foreign country.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specific period.