Monday, July 11, 2005
Peg
PEG:
One currency is said to be pegged to another when the exchange rate between the two is fixed and the market forces do not influence the exchange rate. For instance the chinese yuan is pegged at 8 yuan to a dollar which means that one dollar will buy 8 yuans no matter what the markket conditions are.
http://www.19.5degs.com/element/18039.php
Purchasing Price Parity:
Purchasing Price Parity means the value of one currency against another in terms of a common basket of goods that they can buy in their respective countries. For instance to value a dollar against a rupee it needs to be seen how many of a burger, petrol and shirt can a dollar buy and how much of the same can the rupee buy. Then the two shall be compared to arrive at a price. (the examples taken are hypothetical).
http://www.19.5degs.com/next.php?r=18037&c=652
Purchasing power parity:
In economics, purchasing power parity (PPP) is a method used to calculate exchange rates between the currencies of different countries. PPP exchange rates are used in international comparisons of standard of living. They calculate the relative value of currencies based on what those currencies will buy in their nation of origin. Typically, the prices of many goods will be considered, and weighted according to their importance in the economy.
http://www.investordictionary.com/definition/purchasing+power+parity.aspx
Commodity Price Index (CPI):
Index or average, which may be weighted, of selected commodity prices, intended to be representative of the markets in general or a specific subset of commodities, e.g., grains or livestock.
http://www.investordictionary.com/definition/commodity+price+index.aspx
One currency is said to be pegged to another when the exchange rate between the two is fixed and the market forces do not influence the exchange rate. For instance the chinese yuan is pegged at 8 yuan to a dollar which means that one dollar will buy 8 yuans no matter what the markket conditions are.
http://www.19.5degs.com/element/18039.php
Purchasing Price Parity:
Purchasing Price Parity means the value of one currency against another in terms of a common basket of goods that they can buy in their respective countries. For instance to value a dollar against a rupee it needs to be seen how many of a burger, petrol and shirt can a dollar buy and how much of the same can the rupee buy. Then the two shall be compared to arrive at a price. (the examples taken are hypothetical).
http://www.19.5degs.com/next.php?r=18037&c=652
Purchasing power parity:
In economics, purchasing power parity (PPP) is a method used to calculate exchange rates between the currencies of different countries. PPP exchange rates are used in international comparisons of standard of living. They calculate the relative value of currencies based on what those currencies will buy in their nation of origin. Typically, the prices of many goods will be considered, and weighted according to their importance in the economy.
http://www.investordictionary.com/definition/purchasing+power+parity.aspx
Commodity Price Index (CPI):
Index or average, which may be weighted, of selected commodity prices, intended to be representative of the markets in general or a specific subset of commodities, e.g., grains or livestock.
http://www.investordictionary.com/definition/commodity+price+index.aspx
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