Pre Test Quiz - Foreign Exchange Products | Attempts: 668

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Anurag_quiz

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Quizzes Created: 5 | Total Attempts: 3,113

Questions: 5 | Attempts: 668 | Updated: Mar 21, 2023

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Pre Test Quiz - Foreign Exchange Products - 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. !

Questions and Answers

1.

If the U.S. dollar depreciates in terms of the Euro
- A.
  
  The relative price of U.S. exports would rise.
- B.
  
  European goods would be cheaper for Americans
- C.
  
  American goods would be cheaper for Europeans
- D.
  
  Americans would have to pay fewer dollars for one Euro.
Correct Answer
C. 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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2.

What accounts for most of the activity in the foreign exchange market?
- A.
  
  Currency trade among central banks
- B.
  
  Trading currency between importers and exporters
- C.
  
  Interbank trading
- D.
  
  Trading by financial institutions
Correct Answer
C. 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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3.

Which of the following is NOT a major currency trading center?
- A.
  
  New York
- B.
  
  Tokyo
- C.
  
  Frankfurt
- D.
  
  Chicago
- E.
  
  London
Correct Answer
D. 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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1
0
4.

Which of the following is most actively traded currency?
- A.
  
  USD
- B.
  
  GBP
- C.
  
  EUR
- D.
  
  CNY
Correct Answer
A. USD

Explanation
The USD is the most actively traded currency because it is the global reserve currency and is widely accepted for international transactions. It is used as a benchmark for many commodities and is involved in the majority of foreign exchange transactions. The United States has the largest economy in the world, which also contributes to the high trading volume of the USD.

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5.

Foreign Exchange market is open 24 hours a day on weekdays
- A.
  
  True
- B.
  
  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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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
Aug 23, 2012

Quiz Created by
Anurag_quiz

Pre Test Quiz - Foreign Exchange Products

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

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

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

Which of the following is most actively traded currency?

Foreign Exchange market is open 24 hours a day on weekdays