Which of the following is/are TRUE with respect to spot market liquidity? I. The market liquidity improves if more buyers and sellers willing to participate in the currency trading. II. The spot markets for heavily traded currencies such as the Euro and Pound are very liquid. III. A currency's liquidity affects the ease with which an MNC can obtain or sell that currency. IV. If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a reasonable exchange rate. A. I, II, III B. I, III, IV C. II, III, IV D. I, II
Which of the following is/are TRUE with respect to spot market liquidity? I. The market liquidity improves if more buyers and sellers willing to participate in the currency trading. II. The spot markets for heavily traded currencies such as the Euro and Pound are very liquid. III. A currency's liquidity affects the ease with which an MNC can obtain or sell that currency. IV. If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a reasonable exchange rate. A. I, II, III B. I, III, IV C. II, III, IV D. I, II
Chapter9: Forecasting Exchange Rates
Section: Chapter Questions
Problem 13QA
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Question
Which of the following is/are TRUE with respect to spot market liquidity?
I. The market liquidity improves if more buyers and sellers willing to participate in the currency trading.
II. The spot markets for heavily traded currencies such as the Euro and Pound are very liquid.
III. A currency's liquidity affects the ease with which an MNC can obtain or sell that currency.
IV. If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a reasonable exchange rate.
A.
I, II, III
B.
I, III, IV
C.
II, III, IV
D.
I, II
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