the price on the stock exchanges of capitalist countries at which shares, bonds, other securities, and foreign exchange are traded. The rate-of-exchange price is an expression of capitalized gains, that is, it corresponds to that sum of money which if granted as a loan would have a yield equivalent to the yield of the security. The rate-of-exchange price depends on the yield of the security and on the average rate of interest, the increase of which entails a decrease in the rate-of-exchange price and vice versa. Its value is also affected by fluctuations of demand and supply of securities.
In the age of imperialism, when major banks are merging with exchanges, the banks are becoming centers of exchange speculation, which has significantly expanded the securities market and its role. Capitalist banks and large-scale securities holders often come together for joint speculation on the fluctuation of exchange rates on circulating stocks, bonds, and other securities (which represent fictional capital). The difference between the nominal and the rate-of-exchange price of securities is one of the sources of the enrichment of monopolies.
The rate-of-exchange price of foreign currency is determined on the basis of gold parity. According to the gold standard, the rate-of-exchange price of foreign currency could deviate from parity within the limits of the gold points. During inflation the rate-of-exchange price depends chiefly on the degree of devaluation of paper currency in relation to gold and on the condition of the country’s balance of payments.