Topic 8

3. The currency held by central banks for international transactions.
5. An organization that promotes global monetary cooperation and financial stability.
8. An international organization that promotes global trade.
11. The exchange rate adjusted for inflation differences between countries.
17. The price at which one currency can be exchanged for another.
19. When the forward exchange rate is lower than the spot rate.
21. The principle that identical goods should have the same price in different markets when converted to a common currency.
24. A standardized agreement to buy or sell a currency at a future date.
25. An option that gives the holder the right to sell a currency at a set price.
27. The exchange rate quoted as the foreign currency per unit of domestic currency.
28. A currency system where the value is determined by supply and demand.
29. A theory stating that interest rate differentials between countries affect exchange rates.

1. An international financial institution providing loans to developing countries.
2. A measure of a currency’s value against a basket of other currencies.
4. The exchange rate for immediate delivery of currencies.
6. Limits on the quantity of goods that can be imported.
7. The predetermined price at which an option can be exercised.
9. A tax imposed on imported goods.
10. A theory stating that exchange rates adjust to equalize the purchasing power of different currencies.
12. A contract to exchange currencies at a future date at a predetermined rate.
13. The decrease in value of an asset over time.
14. An option that gives the holder the right to buy a currency at a set price.
15. When the forward exchange rate is higher than the spot rate.
16. A currency system where the value is pegged to another currency or gold.
18. The increase in value of an asset over time.
20. A derivative contract where two parties agree to exchange cash flows or currencies at future dates.
22. The exchange rate quoted as the domestic currency per unit of foreign currency.
23. The market where currencies are traded.
26. The exchange rate without adjustment for inflation.