Question : What is the term used to describe the rate at which one currency can be exchanged for another currency?
Option 1: Exchange rate
Option 2: Interest rate
Option 3: Inflation rate
Option 4: GDP growth rate
Correct Answer:
Exchange rate
Solution : The correct answer is a) Exchange rate
The term used to describe the rate at which one currency can be exchanged for another currency is the exchange rate. It represents the value of one currency in terms of another currency. Exchange rates are quoted as the amount of one currency needed to purchase or sell a unit of another currency. They can be expressed in various forms, such as direct or indirect rates, spot rates, or forward rates, depending on the context and specific requirements of the transaction. Exchange rates play a crucial role in international trade, investment, and financial transactions.
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