Question : Which of the following is an example of an indirect exchange rate quotation?
Option 1: USD/JPY = 110.50
Option 2: EUR/GBP = 0.85
Option 3: GBP/CHF = 1.25
Option 4: AUD/CAD = 0.95
Correct Answer: EUR/GBP = 0.85
Solution : The correct answer is b) EUR/GBP = 0.85
An indirect exchange rate quotation is when the domestic currency is the base currency, and the foreign currency is the counter currency. In this example, EUR (Euro) is the domestic currency, and GBP (British pound) is the foreign currency. The exchange rate is expressed as the amount of the foreign currency required to purchase one unit of the domestic currency. Therefore, EUR/GBP = 0.85 means that it takes 0.85 British pounds to buy one Euro.
Option 1: USD/INR = 75.50
Option 2: EUR/USD = 1.20
Option 3: GBP/AUD = 1.80
Option 4: JPY/GBP = 0.0075
Question : Which of the following is an example of a direct exchange rate quotation?
Option 1: USD/EUR = 1.25
Option 2: EUR/USD = 0.80
Option 3: GBP/USD = 1.40
Option 4: AUD/JPY = 82.50
Question : Which of the following is an example of a direct quote for an exchange rate?
Option 1: USD/EUR = 0.85
Option 2: GBP/CAD = 1.65
Option 3: AUD/NZD = 1.10
Option 4: JPY/INR = 0.60
Question : Which of the following is an example of a freely floating exchange rate system?
Option 1: Gold standard
Option 2: Currency board arrangement
Option 3: Managed float exchange rate
Option 4: Pegged exchange rate
Question : Which of the following exchange rate systems provides the highest level of exchange rate stability?
Option 1: Floating exchange rate
Option 2: Fixed exchange rate ‘
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