Economics · Forex Market
What is the primary purpose of the 'chain rule' in foreign exchange arithmetic?
- 1To calculate the moving average of exchange rates using historical data.
- 2To determine the domestic interest rate based on a foreign currency.
- 3To calculate the cross rate between two currencies using a common third currency.✓
- 4To convert a currency directly to another currency without intermediaries.
Correct answer
To calculate the cross rate between two currencies using a common third currency.
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