Ch05_Foreign Exchange Market_Quiz

The greatest amount of foreign exchange trading takes place in the following two cities:

• A. New York and Tokyo.

• B. New York and London.

• C. London and Frankfurt.

• D. London and Tokyo.

Most foreign exchange transactions are through the U.S. dollar. If the transaction is expressed as the foreign currency per dollar this known as ______ whereas ______ are expressed as dollars per foreign unit.

• A. European terms; indirect

• B. American terms; direct

• C. American terms; European terms

• D. European terms; American terms

A/An ______ quote in the United States would be foreign units per dollar, while a/an ______ quote would be in dollars per foreign currency unit.

• A. direct; direct

• B. direct; indirect

• C. indirect; indirect

• D. indirect; direct

The four currencies that constitute about 50% of all foreign exchange trading are:

• A. U.K pound, Chinese yuan, euro, and Japanese yen.

• B. U.S. dollar, euro, Chinese yuan, and U.K. pound.

• C. U.S. dollar, Japanese yen, euro, and U.K. pound.

• D. U.S. dollar, U.K. pound, yen, and Chinese yuan.

______ is NOT one of the three categories reported for foreign exchange.

• A. Spot transactions

• B. Swap transactions

• C. Strip transactions

• D. Forward transactions