The Implicit Exchange Rate Between Two Currencies When Both Are

question 40

Multiple Choice

The implicit exchange rate between two currencies when both are quoted in some third currency is called a(n) :

• A)open exchange rate.
• B)cross-rate.
• C)backward rate.
• D)forward rate.
• E)interest rate.

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Definitions:

P(B / A)

The probability of event B occurring given that event A has already occurred, often used in conditional probability and Bayesian statistics.

Union

In mathematics, especially in set theory, the union of a collection of sets is the set that contains all elements that are a member of any set within the collection.

Random Events

Outcomes or occurrences that cannot be predicted with certainty due to the random nature of the underlying process.

Probability Space

The mathematical framework for probability in which a sample space, together with a probability measure, models the outcome of a random experiment.