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1,What is a ‘Floating Exchange Rate’A floatingexchange rateis a regime where thecurrencyprice is set by theforex marketbased on supply and demand compared with other currencies. This is in contrast to a fixed exchange rate, in which the government entirely or predominantly determines the rate. The currencies of most of the world’s major economies were allowed to float freely following the collapse of the Bretton Woods system in 1971.
2,What is a ‘Bear Market’A market condition in which the prices ofsecuritiesare falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows. Although figures can vary, for many, a downturn of 20% or more in multiple broad market indexes, such as theDow Jones Industrial Average (DJIA)or Standard & Poor’s 500 Index (S&P 500), over at least a two-month period, is considered an entry into a bear market.
1. Floating exchange rate:- It refers to changes in a currency’s value relative to another currencies values.
For eg; one U.S. dollar might buy one British pound today, but it might only buy 0.95 British pounds tomorrow. The value “Floats”
2. Bear market:- The market condition in which the price of securities are falling.
A floating exchange rate is a regime where the currency price is set by the forex market based on supply and demand compared with other currencies.
Floating exchange rate is the System in which a currency value is determined solely by the interplay of the market forces of demand and supply.
bear market is refers to increase in price.
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