Unit 1 - Foreign Exchange - SKC/SoM

The three different types of forex transactions are

• Spot, forward, swaps

• Spot, Cash, OTC

• Spot, forwards, Futures

• Spot, futures & options

Majority of retail forex trading happens in

• Forward Market

• Spot Market

• Futures market

• Swap market

The foreign exchange market is referred to as a market where one country's currency is exchanged for another currency. The currency exchange is usually made through the following methods

• buyers and sellers of foreign exchange meet at a physical location.

• buyers and sellers of foreign exchange meet through a telephone network

• buyers and sellers of foreign exchange meet through computer communications

• A and B

• B and C

When domestic currency appreciates, it benefits_______ and harms________.

• Domestic exporters, domestic importer

• Domestic exporter, foreign importer

• Domestic importer foreign exporter

• Domestic importer, domestic exporter

What prompted Bretton Woods Agreement?

• To set up a system that would maintain a stable exchange rate system

• To create a flexible exchange rate system.

• To stop World War II.

• Eradicate the economic difficulties brought in by World War II.

Assume that a bank's bid rate on Swiss francs is $0.45 and its ask rate is $0.47. Its bid‑ask percentage spread is:

• about 4.44%.

• about 4.26%.

• about 4.03%.

• about 4.17%.

The value of the Australian dollar (A$) today is $0.73. Yesterday, the value of the Australian dollar was $0.69. The Australian dollar ________ by _______%.

• depreciated 5.80

• depreciated 4.00

• appreciated 5.80

• appreciated 4.00

If bid-ask rate for USD/YEN is 111.2015 and 111.2035, then YEN/USD bid and ask rates are going to be _________ and __________.

Assume the Canadian dollar is equal to USD 0.78 and the value INR is equal to USD 0.01923. The value of the INR in Canadian dollars is:

• about 0.015 Canadian dollars.

• about 0.02466 Canadian dollars.

• about 66.66 Canadian dollars.

• about 51.99 Canadian dollars.

• None of these.

Which of the following might affect the cost of a trip to Japan by a resident of Britain?

• The depreciation of the Euro.

• The depreciation of the US dollar.

• The time at which the British resident purchases Yen.

• All of the above.