This quiz works best with JavaScript enabled. Home > International > Currency > Foreign Currency Markets – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Foreign Currency Markets Quiz 7 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Under sterilized intervention policy, RBI is likely to ..... A) Use OMO. B) Purchase foreign currencies. C) Sell foreign currencies. D) Interest rate manipulation. Show Answer Correct Answer: A) Use OMO. 2. Out of the following, which is the most rigid exchange rate system, which does not allow any adjustment in the exchange rate? A) Flexible exchange rate system. B) Gold Standard System of exchange rate. C) Bretton Woods system of exchange rate. D) None of these. Show Answer Correct Answer: B) Gold Standard System of exchange rate. 3. The reduction in the value of the currency due to market forces is known as A) Depreciation. B) Devaluation. C) Appreciation. D) None of the above. Show Answer Correct Answer: A) Depreciation. 4. The rate at which one currency is converted into another A) Foreign Exchange Market. B) Currency Conversion. C) Currency Swaps. D) Exchange Rate. Show Answer Correct Answer: D) Exchange Rate. 5. Between 1947 and 1971, India followed the ..... A) Par value system. B) Basket-peg system. C) Managed flexible system. D) LERMS. Show Answer Correct Answer: A) Par value system. 6. All the following are the contract normally use in Islamic Interbank Market, EXCEPT: A) Mudarabah. B) Murabahah. C) Kafalah. D) Wakalah. Show Answer Correct Answer: C) Kafalah. 7. 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. 8. Simultaneous purchase and sale of a given amount of foreign exchange for two different value dates A) Currency Exchange. B) Forward Exchange Rate. C) Currency Swaps. D) Currency Conversion. Show Answer Correct Answer: C) Currency Swaps. 9. 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. 10. 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. 11. 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. 12. 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) 0.02. B) 1.20. C) 7.00. D) 49.0. Show Answer Correct Answer: A) 0.02. 13. 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. 14. In the foreign exchange market, the ..... of one country is traded for the ..... of another country A) Currency; currency. B) Currency; financial instruments. C) Currency; goods. D) Goods; goods. Show Answer Correct Answer: A) Currency; currency. 15. What prompted Bretton Woods Agreement? A) To set up a system that would maintain a stable exchange rate system. B) To create a flexible exchange rate system. C) To stop World War II. D) Eradicate the economic difficulties brought in by World War II. Show Answer Correct Answer: A) To set up a system that would maintain a stable exchange rate system. 16. 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. 17. The activity of buying and selling, or exchanging, goods and/or services between people or countries. A) Forex Trading. B) Trading. C) Selling. D) Marketing. Show Answer Correct Answer: B) Trading. 18. 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 5.80. B) Depreciated 4.00. C) Appreciated 5.80. D) Appreciated 4.00. Show Answer Correct Answer: A) Depreciated 5.80. 19. 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. 20. In this transaction, the investors has the right to convert the currency but not obligated to so A) FUTURE TRANSACTION. B) SWAP TRANSACTION. C) OPTION TRANSACTION. D) FORWARD TRANSACTION. Show Answer Correct Answer: C) OPTION TRANSACTION. ← 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 6Foreign Currency Markets Quiz 8Foreign Currency Markets Quiz 9Foreign Currency Markets Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books