Global Financial Analysis

3105 WordsJan 26, 201313 Pages
Fundamentals of Multinational Finance, 3e (Moffett) Chapter 5 The Foreign Exchange Market 5.1 Multiple Choice and True/False Questions 1) Which of the following is NOT true regarding the market for foreign exchange? A) The market provides the physical and institutional structure through which the money of one country is exchanged for another. B) The rate of exchange is determined in the market. C) Foreign exchange transactions are physically completed in the foreign exchange market. D) All of the above are true. Answer: D Topic: Introduction to the Foreign Exchange Market Skill: Recognition 2) A/An ________ is an agreement between a buyer and…show more content…
Foreign exchange ________, on the other hand, earn a profit by bringing together buyers and sellers of foreign currencies and earning a commission on each sale and purchase. A) central banks; treasuries B) dealers; brokers C) brokers; dealers D) speculators; arbitragers Answer: B Topic: Foreign Exchange (FX) Market Participants Skill: Recognition 15) The primary motive of foreign exchange activities by most central banks is profit. Answer: FALSE Topic: Foreign Exchange (FX) Market Participants Skill: Recognition 16) Dealers sometimes use brokers in the foreign exchange market because the dealers desire A) speed. B) accuracy. C) to remain anonymous. D) all of the above. Answer: D Topic: Foreign Exchange (FX) Market Participants Skill: Recognition 17) Daily trading volume in the foreign exchange market was about ________ per ________ in 2007. A) $3,200 billion; month B) $1,000 billion; month C) $3,200 billion; day D) $1,000 billion; day Answer: C Topic: FX Trading Volume Skill: Recognition 18) Daily trading volume of foreign exchange had actually decreased in 2004 from the levels reported in 2001. Answer: FALSE
Open Document