A) They are the only currencies accepted for all forms of international trade and investment.
B) Central banks and monetary authorities worldwide hold significant amounts of these currencies as part of their foreign exchange reserves.
C) Their value is directly pegged to a fixed amount of gold, ensuring their stability.
D) Their exchange rates are fixed against all other currencies, eliminating currency risk.
Explanation
A reserve currency is a foreign currency held in large quantities by central banks and monetary authorities as part of their foreign exchange reserves. It is widely used in international transactions, investments, and often serves as a safe-haven asset.
Practice More World Current Affairs Questions