Exchange Rates Assignment Answers
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Exchange Rates: See how we help you to understand things better
How much Indian Rupee would you have to spend to purchase one US Dollar is the exchange rate between the currencies of these two countries.
In simple words, an exchange rate is the price of a nation’s currency against the currency of another nation. Commonly, exchange rates are quoted in value against USD.
Evidently, it has 2 currencies involved; one is base and other is counter. When you’re purchasing a currency, your domestic currency is the base, while the other foreign one is the counter.
On every exchange, when making any transaction, you will find two quoted prices. One is the buying rate is the price at which a dealer will buy the foreign currency. The selling rate is the price at which the dealer will sell that currency. The difference between quoted buying and selling rates is spread, which is determined by the money dealers or exchanges who also include their fee or commission in it for their service and infrastructure. Exchange rates are established in the Foreign Exchange Market or FOREX where dealers meet to mutually buy and sell their assets.
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