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The forward exchange rate is a type of forward price. It is the exchange rate negotiated today between a bank and a client upon entering into a forward contract agreeing to buy or sell some amount of foreign currency in the future. [2][3] Multinational corporations and financial institutions often use the forward market to hedge future payables ...
Purchasing power parity (PPP) [1] is a measure of the price of specific goods in different countries and is used to compare the absolute purchasing power of the countries' currencies. PPP is effectively the ratio of the price of a market basket at one location divided by the price of the basket of goods at a different location.
Currency appreciation and depreciation. Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system in which no official currency value is maintained. Currency appreciation in the same context is an increase in the value of the currency ...
The key currency generally refers to a world currency, which is widely used for pricing, settlement, reserve currency, freely convertible, and internationally accepted currency. Cross rate: After the basic exchange rate is worked out, the exchange rate of the local currency against other foreign currencies can be calculated through the basic ...
The Big Mac Index is a price index published since 1986 by The Economist as an informal way of measuring the purchasing power parity (PPP) between two currencies and providing a test of the extent to which market exchange rates result in goods costing the same in different countries. It "seeks to make exchange-rate theory a bit more digestible ...
The net present value (NPV) or net present worth (NPW) [1] is a way of measuring the value of an asset that has cashflow by adding up the present value of all the future cash flows that asset will generate. The present value of a cash flow depends on the interval of time between now and the cash flow because of the Time value of money (which ...
Exchange rate history of the Indian rupee. This is a list of tables showing the historical timeline of the exchange rate for the Indian rupee (INR) against the special drawing rights unit (SDR), United States dollar (USD), pound sterling (GBP), Deutsche mark (DM), euro (EUR) and Japanese yen (JPY). The rupee was worth one shilling and sixpence ...
A widely traded currency pair is the relation of the euro against the US dollar, designated as EUR / USD. The quotation EUR/USD 1.2500 means that one euro is exchanged for 1.2500 US dollars. Here, EUR is the base currency and USD is the quote currency (counter currency). This means that 1 Euro can be exchangeable to 1.25 US Dollars.