Foreign Exchange

Multiple Choice

Which of the following NOT defining the Foreign Exchange?

• The price at which one currency can be exchanged for another.

• Currencies are traded in pairs example EUR/USD, GBP/JPY.

• Foreign exchange market determines by the interaction of demand and supply.

• The greater the demand for a currency, the lower the price.

Multiple Choice

Choose the BEST answer:

Economic growth will increase the perspective of investors to invest.

• True

• False

Multiple Choice

Inflation will increase the value of the goods and service. This will bring a negative perspective among investors.

• True

• False

Multiple Choice

The Asian Economic Crisis, also known as the Asian Financial Crisis, occurred in 1997-1998 and had profound effects on the economies of several East and Southeast Asian countries. Investors, sensing economic weaknesses and unsustainable exchange rate policies, began speculative attacks on currencies, leading to devaluations.

This situation creates speculation to investor to withdraw their investment from Asia. This scenario falls under which factor?

• Economic growth

• Market psychology

• Government action

• Inflation and interest rates

Fill in the Blank

________ currencies can be freely exchanged for other currencies without restrictions or requiring special permission.

Fill in the Blank

_________ currencies cannot be easily exchanged for other currencies due to government restrictions or a lack of demand in the global market.

Multiple Select

Which of the following represent convertible currency characteristics?

• These currencies are widely accepted in global financial markets.

• Commonly used in international trade, investments, and transactions.

• These currencies have limited acceptance in global financial markets.

• S Dollar (USD), Euro (EUR), Japanese Yen (JPY), British Pound (GBP).