Suppose a teacher puts the following question in the economics test. What is foreign exchange rate? And she gives the following options provided below. You are one of her students attempting the test. What would be your answer?

Price of one currency in terms of gold in the domestic market Price of domestic currency in relation to foreign currency in the market Price of one commodity in terms of currency in the domestic market Price of one currency in relation to another currency in the international money market

Price of one currency in relation to another currency in the international money market

Foreign exchange rate is the price of one currency in relation to another currency in the international money market.