Question : What is the term used to describe the exchange rate between two currencies that does not involve the U.S. dollar?
Option 1: Cross exchange rate
Option 2: Spot exchange rate
Option 3: Nominal exchange rate
Option 4: Real exchange rate
Correct Answer: Cross exchange rate
Solution : The correct answer is (a) Cross exchange rate.
A cross exchange rate refers to the exchange rate between two currencies that does not involve the U.S. dollar. It is the rate at which one currency can be exchanged for another currency without using the U.S. dollar as an intermediate currency.
For example, if you want to determine the exchange rate between the British pound (GBP) and the Japanese yen (JPY), without involving the U.S. dollar, you would be looking at the GBP/JPY cross exchange rate.
Cross exchange rates are important for individuals and businesses engaged in international trade or investment involving currencies other than the U.S. dollar. These rates allow them to directly convert between two specific currencies without going through the U.S. dollar as an intermediary.
Question : What is the term used to describe the difference between the nominal exchange rate and the inflation rate between two countries?
Option 1: Real exchange rate
Option 2: Cross exchange rate
Option 3: Forward exchange rate
Option 4: Spot exchange rate
Question : What is the term used to describe the rate at which a currency can be exchanged immediately in the spot market?
Option 1: Nominal exchange rate
Option 2: Real exchange rate
Option 3: Cross exchange rate
Question : What is the term used to describe the rate at which one currency can be exchanged for another in the spot market?
Option 1: Forward exchange rate
Question : What is the term used to describe the exchange rate that is expected to prevail in the future, based on current market conditions?
Option 1: Spot exchange rate
Option 2: Forward exchange rate
Option 4: Nominal exchange rate
Question : What is the term used to describe the rate at which one currency can be exchanged for another immediately, without any delay?
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