This quiz works best with JavaScript enabled. Home > Economics > International > Currency > Foreign Currency Markets – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Foreign Currency Markets Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Between 1947 and 1971, India followed the ..... A) Managed flexible system. B) LERMS. C) Par value system. D) Basket-peg system. Show Answer Correct Answer: C) Par value system. 2. All the following are the contract normally use in Islamic Interbank Market, EXCEPT: A) Mudarabah. B) Wakalah. C) Murabahah. D) Kafalah. Show Answer Correct Answer: D) Kafalah. 3. Under a floating exchange rate system, what determines the exchange rate for each currency? A) A currency's par value. B) The gold standard. C) Its pegged value. D) The forces of supply and demand. Show Answer Correct Answer: D) The forces of supply and demand. 4. Simultaneous purchase and sale of a given amount of foreign exchange for two different value dates A) Forward Exchange Rate. B) Currency Conversion. C) Currency Exchange. D) Currency Swaps. Show Answer Correct Answer: D) Currency Swaps. 5. People who buy and sell things in the hope of making a profit are known as ..... A) Speculators. B) Traders. C) Sellers. D) None of above. Show Answer Correct Answer: A) Speculators. 6. If Rupees 150 required to buy $ 3, instead of rupees 80 for $ 2 earlier, then: A) Domestic currency has depreciated. B) Domestic currency has appreciated. C) All of the above. D) None of these. Show Answer Correct Answer: A) Domestic currency has depreciated. 7. Which of the following countries is an important offshore financial center? A) Turks and Caicos. B) Mexico. C) South Korea. D) Bermuda. Show Answer Correct Answer: D) Bermuda. 8. On January 25, 2009, one Canadian dollar traded on the foreign exchange market for about 49.0 Indian rupees. Thus, one Indian rupee would have purchased about ..... Canadian dollars. A) 49.0. B) 1.20. C) 7.00. D) 0.02. Show Answer Correct Answer: D) 0.02. 9. What is Foreign Exchange Market? A) A place where corporation and government can raise fund. B) A market for converting currency of one country into another country. C) Trading of instrument by an exchange of securities. D) None of above. Show Answer Correct Answer: B) A market for converting currency of one country into another country. 10. In the foreign exchange market, the ..... of one country is traded for the ..... of another country A) Goods; goods. B) Currency; financial instruments. C) Currency; goods. D) Currency; currency. Show Answer Correct Answer: D) Currency; currency. 11. What prompted Bretton Woods Agreement? A) To set up a system that would maintain a stable exchange rate system. B) Eradicate the economic difficulties brought in by World War II. C) To stop World War II. D) To create a flexible exchange rate system. Show Answer Correct Answer: A) To set up a system that would maintain a stable exchange rate system. 12. Below are factors that affecting forex rates.a. Relative Price Levelb. Relative Inflation Ratec. Relative Income Leveld. Government Expendituree. Relative to GDPf. A) A, b, c. B) A, c, d. C) B, c, d. D) All above. Show Answer Correct Answer: C) B, c, d. 13. The activity of buying and selling, or exchanging, goods and/or services between people or countries. A) Forex Trading. B) Selling. C) Marketing. D) Trading. Show Answer Correct Answer: D) Trading. 14. 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 ..... %. A) Depreciated 4.00. B) Appreciated 5.80. C) Depreciated 5.80. D) Appreciated 4.00. Show Answer Correct Answer: C) Depreciated 5.80. 15. Which of the following is the source of demand for foreign exchange? A) Foreign investment. B) Income receipts. C) Imports. D) Both a &c. Show Answer Correct Answer: D) Both a &c. 16. In this transaction, the investors has the right to convert the currency but not obligated to so A) SWAP TRANSACTION. B) FORWARD TRANSACTION. C) OPTION TRANSACTION. D) FUTURE TRANSACTION. Show Answer Correct Answer: C) OPTION TRANSACTION. 17. KINDS OF TRADERS:The following are the attributes of Swing Traders except: A) Charts:H1-H4. B) Trade Duration:Less Than a week. C) Target:10-20 pips per day. D) None of above. Show Answer Correct Answer: C) Target:10-20 pips per day. 18. Spot market is the market where; A) Only current transactions are handled. B) Forward rate of exchange is determined. C) All of the above. D) None of these. Show Answer Correct Answer: A) Only current transactions are handled. 19. Economics teaches that: A) Foreign exchange markets are always efficient. B) Exchange rates should be determined by the market fundamentals. C) Exchange rates are sometimes dependent to interest rates. D) None of above. Show Answer Correct Answer: B) Exchange rates should be determined by the market fundamentals. 20. How much of one country's money is worth compared to another country? A) Exchange control. B) Currency. C) Foreign trade. D) Exchange rate. Show Answer Correct Answer: D) Exchange rate. 21. Which of the following might affect the cost of a trip to Japan by a resident of Britain? A) The depreciation of the Euro. B) The depreciation of the US dollar. C) The time at which the British resident purchases Yen. D) All of the above. Show Answer Correct Answer: C) The time at which the British resident purchases Yen. 22. ..... in the domestic interest rate causes the demand for domestic assets to increase and the domestic currency to ....., everything else held constant. A) An increase; depreciate. B) A decrease; depreciate. C) A decrease; appreciate. D) An increase; appreciate. Show Answer Correct Answer: D) An increase; appreciate. 23. India's foreign exchange system is A) Free float. B) Fixed. C) Managed float. D) None. Show Answer Correct Answer: C) Managed float. 24. Identify the most traded currency around the world. A) Yuan. B) US Dollar. C) Euro. D) Malaysian Ringgit. Show Answer Correct Answer: B) US Dollar. 25. The responsibility for administration of FEMA is vested with A) State Government. B) Banks. C) Central Government. D) RBI. Show Answer Correct Answer: D) RBI. 26. GBP is the currency of ..... A) UK. B) USA. C) Japan. D) Chaina. Show Answer Correct Answer: A) UK. 27. It is is the trading of different national currencies or units of account A) Importation. B) Foreign Exchange. C) Credit Market. D) None of the above. Show Answer Correct Answer: B) Foreign Exchange. 28. Demand curve of a foreign exchange is: A) Not related to rate of exchange. B) Negatively related to the rate of exchange. C) Proportionately related to rate of exchange. D) Positively related to rate of exchange. Show Answer Correct Answer: B) Negatively related to the rate of exchange. 29. The total amount of money spent in a market is ..... A) The turnover. B) The liquidity. C) The equity. D) None of above. Show Answer Correct Answer: A) The turnover. 30. All Forex transactions involve ..... A) Three types of currencies. B) Two counterparts. C) Three parties. D) None of above. Show Answer Correct Answer: B) Two counterparts. ← PreviousNext →Related QuizzesInternational QuizzesEconomics QuizzesForeign Currency Markets Quiz 1Foreign Currency Markets Quiz 2Foreign Currency Markets Quiz 3Foreign Currency Markets Quiz 4Foreign Currency Markets Quiz 6 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books