This quiz works best with JavaScript enabled. Home > International > Currency > Foreign Currency Markets – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Foreign Currency Markets Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Hedging is used by companies to A) Decrease the variability of tax paid. B) Decrease the spread between spot and forward market quotes. C) Increase the variability of expected cash flows. D) Decrease the variability of expected cash flows. Show Answer Correct Answer: D) Decrease the variability of expected cash flows. 2. All of above are true about Malaysian Government Securities accept A) Issued in multiples of RM 1000. B) Can be traded in secondary market. C) Maturities not exceeding one year. D) Price is determined by forces of supply and demand. Show Answer Correct Answer: C) Maturities not exceeding one year. 3. ..... in the expected future domestic exchange rate causes the demand for domestic assets to shift to the ..... and the domestic currency to depreciate, everything else held constant A) An increase; right. B) An increase; left. C) A decrease; right. D) A decrease; left. Show Answer Correct Answer: D) A decrease; left. 4. All are The Business Forex Trading principles except: A) 24 HOURS Market Gives Flexibility. B) Build your business from anywhere in the world. C) Plan your daily trading routine around your day job. D) Maintenance proof and worry free. Show Answer Correct Answer: D) Maintenance proof and worry free. 5. Stability is a merit of A) Fixed exchange rate system. B) Flexible exchange rate system. C) Both. D) None of above. Show Answer Correct Answer: A) Fixed exchange rate system. 6. Occurs when a buyer and seller enter an agreement of purchase of currency after 90 days A) FORWARD TRANSACTION. B) SWAP TRANSACTION. C) FUTURE TRANSACTION. D) OPTION TRANSACTION. Show Answer Correct Answer: A) FORWARD TRANSACTION. 7. The participants in money market are A) Household and firms. B) Firm and government. C) Banking and non banking instituions. D) None of above. Show Answer Correct Answer: C) Banking and non banking instituions. 8. What is a currency selling at if the forward price is less than the spot price? A) Forward premium. B) Forward discount. C) Par value. D) None of above. Show Answer Correct Answer: B) Forward discount. 9. FOREX is A) Foreign currency. B) Foreign country. C) A Share market. D) None of above. Show Answer Correct Answer: A) Foreign currency. 10. A(n) ..... is the price of one currency in terms of a second currency. A) Export rate. B) Exchange rate. C) Excise tax rate. D) Interest payment. Show Answer Correct Answer: B) Exchange rate. 11. Forex trading can be ..... A) Done 24 times per day. B) Done 24 hours a day. C) Done 24 hours every week. D) None of above. Show Answer Correct Answer: B) Done 24 hours a day. 12. Equilibrium exchange rate occurs when: A) Supply of foreign exchange> demand of foreign exchange. B) Supply of foreign exchange = demand of foreign exchange. C) Supply of foreign exchange < demand of foreign exchange. D) Both a and b. Show Answer Correct Answer: B) Supply of foreign exchange = demand of foreign exchange. 13. What is the difference between a fixed rate exchange system and a floating rate system? A) Government sets rate vs market sets rate. B) Doesn't exist vs does exist. C) Never changing vs always changing. D) Currency never appreciates vs can appreciate. Show Answer Correct Answer: A) Government sets rate vs market sets rate. 14. The first eurocurrency, and they still have the most influence A) EUROYEN. B) EURODOLLARS. C) EUROBOND. D) None of above. Show Answer Correct Answer: B) EURODOLLARS. 15. What determines a country's borrowing power from the IMF? A) Country size. B) Loan size. C) A quota. D) The World Bank. Show Answer Correct Answer: C) A quota. 16. Ninety-five percent of Forex transactions ..... A) Are forbidden. B) Dangerous. C) Are speculative. D) None of above. Show Answer Correct Answer: C) Are speculative. 17. Only non-residents can convert their holdings of domestic currency into a foreign currency A) Convertible. B) Externally convertible. C) Nonconvertible. D) Freely convertible. Show Answer Correct Answer: B) Externally convertible. 18. Under which system Demand and supply for FOREX determines the exchange rate A) Flexible exchange rate. B) Fixed exchange rate. C) Both. D) None of above. Show Answer Correct Answer: A) Flexible exchange rate. 19. The ..... consists of foreign-exchange transactions that are to occur sometime in the future. A) Spot market. B) Soft currency market. C) Bond market. D) Forward market. Show Answer Correct Answer: D) Forward market. 20. What term refers to a currency on deposit outside its country of issue? A) Eurocurrency. B) Eurodollar. C) Euroyen. D) Europound. Show Answer Correct Answer: A) Eurocurrency. ← PreviousNext →Related QuizzesInternational QuizzesForeign Currency Markets Quiz 1Foreign Currency Markets Quiz 2Foreign Currency Markets Quiz 3Foreign Currency Markets Quiz 4Foreign Currency Markets Quiz 5Foreign Currency Markets Quiz 7Foreign Currency Markets Quiz 8Foreign Currency Markets Quiz 9Foreign Currency Markets Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books