Foreign Exchange and Currency Valuation Quiz

Foreign exchange refers to the trading of currencies between different nations.

The Indian Rupee is not considered a major currency in the global foreign exchange market.

Currency valuation involves assessing and establishing the worth of a nation's currency.

Various factors such as economic indicators, political stability, and market sentiment can influence currency valuation.

Currency pegging is a policy where a currency's value is fixed or tied to another currency or a basket of currencies.

Central banks play a crucial role in managing currency valuation by implementing policies to regulate and stabilize the foreign exchange market.

Fixed exchange rates are established by governments, whereas floating exchange rates are influenced by market supply and demand.

Currency appreciation refers to a rise in the value of a currency compared to another currency in the foreign exchange market.

A currency swap involves exchanging currencies at a future date and at a pre-agreed exchange rate between two parties.

The spot exchange rate is the current rate at which currencies are traded for immediate settlement or delivery.

The carry trade involves borrowing in a low-interest-rate currency to invest in a higher-yielding currency, aiming for profit.

Currency intervention by central banks aims to stabilize and control currency exchange rates in the foreign exchange market.

Speculators in the foreign exchange market aim to profit from fluctuations and changes in currency valuations.

Exchange rate regimes play a crucial role in determining the flexibility and mechanisms of currency valuations.

The Bretton Woods Agreement was a landmark accord that established the International Monetary Fund (IMF) and the World Bank to promote global economic stability.

The Plaza Accord was an agreement among major economies to depreciate the value of the U.S. dollar against other major currencies.