Answer:
FOREIGN EXCHANGE RATE
Explanation:
Foreign Exchange Rate is the rate at which two currencies are exchanged for each other .
It can also be refferered to as price of one currency in terms of other currency
Eg : 1$ = Rs 50
If exchange rate increases , it means the value of currency in terms of other currency has worsened -The currency has depreciated / devalued . Eg : 1$ = Rs 60
If exchange rate falls , it means the value of currency in terms of other currency has improved - The currency has appreciated / revalued . Eg : 1$ = Rs 40
Foreign Exchange Rate determination system can be :
Fixed / Pegged System : Exchange rate fixed by government . Forex rate change in it is called - devaluation , revaluation
Flexible / Floating System : Exchange rate freely determined as per forex demand & supply . Forex rate change in it is called depreciation , appreciation.
Foreign Exchange Markets can be :
Spot Market - Exchange takes place immidiately as per prevailing exchange rate
Forward Market - Exchange takes place on later specified date at a predetermined rate
