Forex trading Exam Questions and Answers
1. How much money should you generally start with with forex
trading? Correct Answer: £250.00
2. what is the price of the currency a reflection of? Correct Answer: a reflection of
what the market thinks about the current and future condition of a country's economy compared
to other economies.
3. what are the two main aims of a forex trader? Correct Answer: To buy a
currency pair when exchange rates are expected to rise and to sell a currency pair when
exhcange rates are expected to fall.
4. what are the currency pairs divided into?
What currency pairs should you start off trading? Correct Answer:
Majors, exotics and crosses. the common currency pairs.
5. what are majors? Correct Answer: developed economies, most liquid, low spreads, stable
are predictable in relation to other asset classes.
6. what are the top major currencies? Correct Answer: USD, EUR, JPY, GBP
7. What are crosses? Correct Answer: currency pairs with the absence of the us dollars. you
can have ditterent dominated crosses such as Correct Answer: euro crosses, yen crosses and the
pound crosses.
8. what are exotic currencies? Correct Answer: currencies from developing countries,
extremely liquid, very high spreads.
9. whta does this pair tell you ? - EUR / USD 1.2302 Correct Answer: that one
euro is worth 1.2302 us dollars.
10. describe a micro lot Correct Answer: They are the smallest trading size, they = 1,000
units of currency, their volume(trading size) is 0.01 and they are worth 10p. 10 pips = £1.00 with a
micro lot.
11. describe a mini lot Correct Answer: They are 10x the micro lot, they = 10,000 units od
currency, their volume(trading size)
= 0.1 and they are worth £1.00. 10 pips = £10.00 with a mini lot.
12. describe a standard lot Correct Answer: They are the original and largest trading
size, they = 100,000 units of currency, their volume (trading size) = 1.0 and they are worth £10. 10
pips = £100 with a standard lot.
13. What does PIP stand for and what does it represent? Correct Answer:
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,Forex trading Exam Questions and Answers
price interest point, it represents the smallest change in a currency pair
14. what does this reading represent? 1..2304 Correct
Answer: the 1.2302 = selling price and the 1.2304 = the buying price. the ditterence
between 4 and the 2 is called the spread. Clearly here, you would have received a loss.
15. a smaller spread = what ? Correct Answer: a more liquid currency which means
the currency moves quickly because it is easier to make profits... higher spread meas you need
more pips.
16. how do central banks influence currency rates? Correct Answer: by
interest rates and quantitative easing (increasing money supply to encourage investments
and lending).
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1. How much money should you generally start with with forex
trading? Correct Answer: £250.00
2. what is the price of the currency a reflection of? Correct Answer: a reflection of
what the market thinks about the current and future condition of a country's economy compared
to other economies.
3. what are the two main aims of a forex trader? Correct Answer: To buy a
currency pair when exchange rates are expected to rise and to sell a currency pair when
exhcange rates are expected to fall.
4. what are the currency pairs divided into?
What currency pairs should you start off trading? Correct Answer:
Majors, exotics and crosses. the common currency pairs.
5. what are majors? Correct Answer: developed economies, most liquid, low spreads, stable
are predictable in relation to other asset classes.
6. what are the top major currencies? Correct Answer: USD, EUR, JPY, GBP
7. What are crosses? Correct Answer: currency pairs with the absence of the us dollars. you
can have ditterent dominated crosses such as Correct Answer: euro crosses, yen crosses and the
pound crosses.
8. what are exotic currencies? Correct Answer: currencies from developing countries,
extremely liquid, very high spreads.
9. whta does this pair tell you ? - EUR / USD 1.2302 Correct Answer: that one
euro is worth 1.2302 us dollars.
10. describe a micro lot Correct Answer: They are the smallest trading size, they = 1,000
units of currency, their volume(trading size) is 0.01 and they are worth 10p. 10 pips = £1.00 with a
micro lot.
11. describe a mini lot Correct Answer: They are 10x the micro lot, they = 10,000 units od
currency, their volume(trading size)
= 0.1 and they are worth £1.00. 10 pips = £10.00 with a mini lot.
12. describe a standard lot Correct Answer: They are the original and largest trading
size, they = 100,000 units of currency, their volume (trading size) = 1.0 and they are worth £10. 10
pips = £100 with a standard lot.
13. What does PIP stand for and what does it represent? Correct Answer:
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13
,Forex trading Exam Questions and Answers
price interest point, it represents the smallest change in a currency pair
14. what does this reading represent? 1..2304 Correct
Answer: the 1.2302 = selling price and the 1.2304 = the buying price. the ditterence
between 4 and the 2 is called the spread. Clearly here, you would have received a loss.
15. a smaller spread = what ? Correct Answer: a more liquid currency which means
the currency moves quickly because it is easier to make profits... higher spread meas you need
more pips.
16. how do central banks influence currency rates? Correct Answer: by
interest rates and quantitative easing (increasing money supply to encourage investments
and lending).
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