Question
The exchange rate system where the value of a currency
is determined by market forces is called a:Solution
In a floating (or flexible) exchange rate system, the currency's value is allowed to fluctuate in response to foreign exchange market mechanisms without direct government or central bank intervention.
A foreign subsidiary reports its accounts in USD. On consolidation, the holding company translates the figures into INR. Which rate should be used for i...
The exchange rate system where the value of a currency is pegged to another major currency or basket of currencies is called:
A firm in India has to pay €5 million in 3 months. They expect the rupee to depreciate against the euro. Which of the following hedging tools will bes...
If the direct quote in India is USD/INR = 83.50, what is the indirect quote?
The theory that states the exchange rate between two currencies is determined by the relative price levels in the two countries is the:
An Indian exporter receives a payment of USD 50,000 when the exchange rate is ₹83/USD. At the year-end, the rate drops to ₹80/USD and the amount is ...
Exchange rate determination by comparing purchasing power of currencies is:
If USD/INR = 83.00 and GBP/USD = 1.25, what is the GBP/INR cross rate?
Covered Interest Arbitrage involves:
A company imports machinery payable in USD after 6 months. If the liability remains unpaid at year-end and the exchange rate has increased, how should t...
