Answers
1. Forex trading Correct Answer: 1. Simultaneous exchanging of one currency for another
2. No physical location or central exchange 24hr trading
2. Customers Correct Answer: 1. Corporation, hedge funds, mutual funds, pension funds, central
banks
2. Trade with a dealer
3. Dealers Correct Answer: 1. Mostly large banks take customer orders
2. Make markets from owned inventory
4. Inter dealer market Correct Answer: 1. Direct dealing - dealer to dealer (Phone,
electronically)
2. Indirectly (Inter dealer brokers (phone, electronically)
5. Inter dealer markets types Correct Answer: 1. Voice
2. Conversational systems
3. Voice broker
6. FX Quotes Correct Answer: 1. Exchange rate is the price to buy or sell currency per unit base
currency
7. Euro dollar quote 1.185 Correct Answer: Price of 1 euro is 1.185 dollars
8. Forex Quotes American Terms Correct Answer: Base currency is foreign - Euro
dollar
9. Forex Quotes European terms Correct Answer: Base currency is dollars - Dollar
Yen
10. Non Dollar currency pairs Correct Answer: Cross rates - Euro Yen
11. Exchange rate two way Correct Answer: 1. Customers sells at bid price
2. Customer buys at ask price
12. PIP Correct Answer: Smallest quote increment (0.0001)
13. Euro dollar quote 0.8893 Correct Answer: 1. Big figure 0.88
2. Pip 93
14. Settlement Correct Answer:
Spot forex trades settle at T+2 Use
SWIFT
15. Exchanges rates are determined by Correct Answer: supply and demand for
each currency pair
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