Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 3 of 12
Which one(s) is (are) true?
II. An increase in the real exchange rate implies a reduction in the relative purchasing power of the domestic currency.
I. The real exchange rate can be defined as the nominal exchange rate that takes the inflation differentials among countries into account.
II. An increase in the real exchange rate implies a reduction in the relative purchasing power of the domestic currency.
User Contributed Comments 0
You need to log in first to add your comment.
I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
describe the foreign exchange market, including its functions and participants, distinguish between nominal and real exchange rates, and calculate and interpret the percentage change in a currency relative to another currency
CFA® 2025 Level I Curriculum, Volume 1, Module 7.