Q. 124.0( 1 Vote )

Why do we n

Answer :

Foreign exchange is extremely important due to the following reasons:

a. The foreign exchange facilitates the conversion of one currency into another currency. It helps in the transfer of purchasing power between the two currencies.

b. This is done using various credit instruments that suggest Bank draft, telegraphic transfer, and foreign bill.

c. In this process, the foreign exchange market carries out payment internationally by clearing debt in both directions.

d. It provides credit to promote foreign trade both International Li and internationally.

e. It also provides the facility for hedging anticipated or actual liabilities through forwarding contracts in exchange.

f. Hedging is the avoidance of foreign exchange risk.

g. A forward contract is a contract to buy or sell foreign exchange against another currency at a fixed rate in the future at a price agreed upon now.

Rate this question :

How useful is this solution?
We strive to provide quality solutions. Please rate us to serve you better.
Try our Mini CourseMaster Important Topics in 7 DaysLearn from IITians, NITians, Doctors & Academic Experts
Dedicated counsellor for each student
24X7 Doubt Resolution
Daily Report Card
Detailed Performance Evaluation
view all courses

Primary deficit eEconomics - Board Papers

Foreign exchange Economics - Board Papers

(a) Define “TradeEconomics - Board Papers