Pre Test Quiz - Foreign Exchange Products

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  • 1/5 Questions

    Which of the following is most actively traded currency?

    • USD
    • GBP
    • EUR
    • CNY
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About This Quiz

This is a pre course quiz and we would also send you a post course quiz subsequently. This quiz is not intended to check your knowledge, but to check the effectiveness of the training.
Hence, request you to please answer the quiz as you know and not by searching the answers on internet. . All the best. !

Pre Test Quiz - Foreign Exchange Products - Quiz

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  • 2. 

    Foreign Exchange market is open 24 hours a day on weekdays

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The foreign exchange market is indeed open 24 hours a day on weekdays. This is because the market operates across different time zones, allowing participants from around the world to trade currencies at any time. The market opens in Asia on Sunday evening and closes in North America on Friday evening, providing continuous trading opportunities throughout the week. As a result, traders can take advantage of global economic events and news that can impact currency prices, making it a highly active and liquid market.

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  • 3. 

    If the U.S. dollar depreciates in terms of the Euro

    • The relative price of U.S. exports would rise.

    • European goods would be cheaper for Americans

    • American goods would be cheaper for Europeans

    • Americans would have to pay fewer dollars for one Euro.

    Correct Answer
    A. American goods would be cheaper for Europeans
    Explanation
    If the U.S. dollar depreciates in terms of the Euro, it means that the value of the U.S. dollar decreases compared to the Euro. As a result, American goods would become cheaper for Europeans. This is because Europeans would need to exchange fewer Euros to obtain the same amount of U.S. dollars, making American goods relatively less expensive for them.

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  • 4. 

    Which of the following is NOT a major currency trading center?

    • New York

    • Tokyo

    • Frankfurt

    • Chicago

    • London

    Correct Answer
    A. Chicago
    Explanation
    Chicago is not a major currency trading center because it is primarily known for its futures and options trading, particularly in commodities such as agricultural products and energy. While it does have some foreign exchange trading activity, it is not on the same level as the other options listed. New York, Tokyo, Frankfurt, and London are all well-known and significant centers for currency trading, with high volumes of transactions and a wide range of market participants.

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  • 5. 

    What accounts for most of the activity in the foreign exchange market?

    • Currency trade among central banks

    • Trading currency between importers and exporters

    • Interbank trading

    • Trading by financial institutions

    Correct Answer
    A. Interbank trading
    Explanation
    Interbank trading is the correct answer because it refers to the exchange of currencies between banks. This type of trading accounts for the majority of the activity in the foreign exchange market as banks trade currencies to meet the needs of their clients, manage their own positions, and speculate on exchange rate movements. It involves large volumes of transactions and plays a crucial role in determining exchange rates.

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Quiz Review Timeline (Updated): Mar 21, 2023 +

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  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Aug 23, 2012
    Quiz Created by
    Anurag_quiz
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