Best answer: What do you mean by foreign exchange rate Class 12?

The rate at which one currency is exchanged for another is called Foreign Exchange Rate. In other words, the foreign exchange rate is the price of one currency stated in terms of another currency. For example, if one U.S dollar exchanges for 60 Indian rupees, then the rate of exchange is 1$ = Rs.

What is meant by foreign exchange rate?

In finance, an exchange rate (also known as a foreign-exchange rate, forex rate, or rate) between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency.

What is meant by foreign exchange rate give three reasons?

Three sources of demand or outflow of foreign exchange are: 1)Imports: It requires foreign exchange because payments for imports are made in foreign exchange only. 2)Foreign Investment: Investment in rest of the world is an important business activity. We need foreign currency in which investment is to be made.

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What is meant by foreign exchange Class 9?

What is meant by foreign exchange? Answer: Currency is the medium of exchange in a country. The Indian currency is called the Indian Rupee. In a country, the foreign currency is called foreign exchange.

What is a foreign exchange rate quizlet?

A foreign exchange rate is the price of one currency expressed in terms of another.

Why do we need foreign exchange Class 12?

It is demanded by the domestic residents for the following reasons: (a) Imports of Goods and Services: When India imports goods and services, foreign exchange is demanded to make the payment for imports of goods and services. (b) Tourism: Foreign exchange is demanded to meet expenditure incurred in foreign tours.

How is foreign currency determined Class 12?

Ans. Foreign exchange rate is determined by the market forces of demand and supply in foreign exchange market. The point where demand and supply of foreign exchange meet, gives the equilibrium rate of exchange as shown in figure and quantity of foreign exchange.

What do you mean by exchange rate Class 10?

Exchange rates are the amount of one currency you can exchange for another. For example, the dollar’s exchange rate tells you how much a dollar is worth in a foreign currency. For example, if you traveled to the United Kingdom on January 29, 2019, you would only receive 0.77 pounds for your one U.S. dollar.

What is foreign exchange rate how it is determined?

A fixed or pegged rate is determined by the government through its central bank. The rate is set against another major world currency (such as the U.S. dollar, euro, or yen). To maintain its exchange rate, the government will buy and sell its own currency against the currency to which it is pegged.

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What is exchange rate Slideshare?

1.  The price of a nation’s currency in terms of another currency.  An exchange rate thus has two components, the domestic currency and a foreign currency. …  In a fixed exchange rate system the XR is set by the government or central bank at a particular rate.

What is an exchange rate with respect to currencies quizlet?

An exchange rate is the price of one currency (domestic –DC or foreign –FC) in terms of another. For an exchange rate of 1.25 USD/EUR we read the “/” as per. So its $1.25 USD per Euro.

Which of the following is the definition of foreign exchange risk?

Foreign exchange risk refers to the losses that an international financial transaction may incur due to currency fluctuations.

What are the three fundamental determinants of exchange rates?

Standard economic models hold that exchange rates are influenced by fundamental variables such as relative money supplies, outputs, inflation rates and interest rates.