Exam 12: Understanding Foreign Exchange Market and Exchange Rate Systems: Part 1

    -------function refer to the function of converting one currency into another.

When supply of foreign exchange is increased given the demand for foreign exchange, the rate of exchange -------.

The -----------is the largest market in the world.

        -------has enabled faster growth of the foreign exchange market.

According to -------theory, the exchange rate between two currencies is determined by their purchasing power.

The -------rate is determined by the demand for and supply of a currency.

Interest rate differentials the exchange rate.

Investment in financial assets like shares or bonds abroad will ------- the demand for foreign exchange.

When demand for foreign exchange increases, the exchange rate -------.

Transactions in the foreign exchange market are carried out are termed as -------.

-------is a feature of the foreign exchange market which enables an investor to earn high returns.

The relative version is considered to be -------to absolute version.

The relative version of the PPP theory is propounded by -------.

Unilateral payments received -------the supply of foreign exchange.

A -------country requires more foreign exchange.

-------exchange rate may be either at a premium or discount or at par.

The purchasing power parity theory the difference in the quality of goods.

Demand for foreign exchange varies -------with the exchange rates.

The degree of -------achieved affect the exchange rate.

The differencbetween bid price and ask price s the -------