BMC CURRENCIES ACTUAL QUESTIONS
AND CORRECT ANSWERS COMPLETE
FOREIGN EXCHANGE STUDY GUIDE
●● This means that all investors
Answer: make explicit or implicit assumptions on currency valuation
●● Money
Answer: A means of exchanging goods and services without the means
of a barter
●● Currency
Answer: a form of money which exists within a defined area
●● Why does the world not use the same currency
Answer: Wide variety of economic conditions and regimes, different
growth prospects, inflations, and employment, difference in how much
money values each good and services, currency accurately represents the
value of goods and services in that economy
●● Global reserve currency
Answer: most central banks hold more reserves in dollars than other
currency, pay more attention to dollars against value of currency
,Many of the world's commodity markets such as oil are priced in dollars
●● Major floating currencies
Answer: Currencies of the world's leading industrialised economies
whose values against other leading currencies are allowed to float freely,
G10 currencies (known as)
●● Emerging floating currencies
Answer: All other countries, relative size and sophistication means some
traded more heavily than others, some could be major floating currencies
but some are not fully floating, not easily convertible into dollars or not
enough liquidity to be traded internationally
●● Some countries choose to align their currencies
Answer: to one or more other currencies, economy might have a
substantial portion of international trade and wants to minimise volatility
to maintain stable trading flows, may attempt to impose inflationary
control by pinning to a country with lower inflationary profiles, fixed
and pegged regimes not necessarily permanent
●● Traditional currencies key feature
Answer: issued and managed by a central bank, major drawback that
when inflation rises or difficulty in repaying debts, it can be tempting for
central bank to issue more of that currency, although it can satisfy
immediate need it can deplete the value of the currency,
, ●● Traditional currencies issued by central banks
Answer: FIAT currencies backed by issuing government
●● Cryptocurrencies
Answer: created or mined using blockchain technology supply removed
by central bank, visible to investors, to maintain the value of currency
●● FX trading exceeds (6.6 trillion dollars)
Answer: global equity, bond, commodity, interest rate markets
●● 88% of all FX trades
Answer: involved US dollar
●● Euro only
Answer: 32%
●● Spot transactions only represent
Answer: 30% of totals (immediate currency transactions)
●● Swaps
AND CORRECT ANSWERS COMPLETE
FOREIGN EXCHANGE STUDY GUIDE
●● This means that all investors
Answer: make explicit or implicit assumptions on currency valuation
●● Money
Answer: A means of exchanging goods and services without the means
of a barter
●● Currency
Answer: a form of money which exists within a defined area
●● Why does the world not use the same currency
Answer: Wide variety of economic conditions and regimes, different
growth prospects, inflations, and employment, difference in how much
money values each good and services, currency accurately represents the
value of goods and services in that economy
●● Global reserve currency
Answer: most central banks hold more reserves in dollars than other
currency, pay more attention to dollars against value of currency
,Many of the world's commodity markets such as oil are priced in dollars
●● Major floating currencies
Answer: Currencies of the world's leading industrialised economies
whose values against other leading currencies are allowed to float freely,
G10 currencies (known as)
●● Emerging floating currencies
Answer: All other countries, relative size and sophistication means some
traded more heavily than others, some could be major floating currencies
but some are not fully floating, not easily convertible into dollars or not
enough liquidity to be traded internationally
●● Some countries choose to align their currencies
Answer: to one or more other currencies, economy might have a
substantial portion of international trade and wants to minimise volatility
to maintain stable trading flows, may attempt to impose inflationary
control by pinning to a country with lower inflationary profiles, fixed
and pegged regimes not necessarily permanent
●● Traditional currencies key feature
Answer: issued and managed by a central bank, major drawback that
when inflation rises or difficulty in repaying debts, it can be tempting for
central bank to issue more of that currency, although it can satisfy
immediate need it can deplete the value of the currency,
, ●● Traditional currencies issued by central banks
Answer: FIAT currencies backed by issuing government
●● Cryptocurrencies
Answer: created or mined using blockchain technology supply removed
by central bank, visible to investors, to maintain the value of currency
●● FX trading exceeds (6.6 trillion dollars)
Answer: global equity, bond, commodity, interest rate markets
●● 88% of all FX trades
Answer: involved US dollar
●● Euro only
Answer: 32%
●● Spot transactions only represent
Answer: 30% of totals (immediate currency transactions)
●● Swaps
