Fin 434 Exam 2 2026 Exam
Questions and Answers |
Already Graded A+
Broadly defined, the ______ market includes the conversion of
purchasing power from one currency into another, bank deposits of
foreign currency, the extension of credit denominated in a foreign
currency, foreign trade financing, trading in foreign currency options and
futures contracts, and currency swaps. - ANSWER ✔✔foreign
exchange
The structure of the foreign exchange market is an outgrowth of one of
the primary functions of a(n) ______ banker: to assist clients in the
conduct of international commerce. - ANSWER ✔✔commercial
,The process of using foreign currency reserves to buy one's own
currency in order to decrease its supply and thus increase its value in
the foreign exchange market, or alternatively, selling one's own currency
for foreign currency in order to increase its supply and lower its price is
referred to as ______. - ANSWER ✔✔intervention
From the U.S. perspective, a(n) ______ quotation is the price of one
U.S. dollar in the foreign currency. - ANSWER ✔✔indirect
Saudi Arabia's currency - ANSWER ✔✔riyal
South Africa's currency - ANSWER ✔✔rand
Thailand's currency - ANSWER ✔✔baht
Singapore's currency - ANSWER ✔✔dollar
South Korea's currency - ANSWER ✔✔won
Turkey's currency - ANSWER ✔✔lira
UK's currency - ANSWER ✔✔pound
Which of the following statements about the foreign exchange market is
correct? - ANSWER ✔✔-It is the largest and most active financial
market in the world
-It is open somewhere in the world 24 hours a day, 365 days a year
,What are ways that cross-exchange rates can be calculated? -
ANSWER ✔✔-The product of an American term and a European term
exchange rate
-The quotient of two American term exchange rates
Foreign exchange is traded in a(n) ______ market, not in a central
marketplace where buyers and sellers congregate. - ANSWER
✔✔over-the-counter
Suppose that the interbank bid for a currency is $1.0543 and the ask is
$1.0545. - ANSWER ✔✔-The big figure for the bid is 1.05
-The retail bid could be 1.0542
international banks - ANSWER ✔✔Financial institutions that buy or
sell foregin currency for their own account to serve retail clients
bank customers - ANSWER ✔✔Multinational corporations, money
managers, and private speculators
nonbank dealers - ANSWER ✔✔Large financial institutions such as
investment banks, mutual funds, pensions, and hedge funds
FX brokers - ANSWER ✔✔Match dealer orders to buy and sell
currencies for a fee, but do not take a position themselves
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, central banks - ANSWER ✔✔A national monetary authority
The currencies that are by convention priced in terms of the U.S. dollar
are said to be in ______ terms (a direct quote from the U.S.
perspective). - ANSWER ✔✔american
The currency of Switzerland is the Swiss ______. - ANSWER
✔✔franc
A zero-risk, zero-investment strategy from which a profit is guaranteed is
called ______. - ANSWER ✔✔arbitrage
A ______-exchange rate is an exchange rate between a currency pair
where neither currency is the U.S. dollar. - ANSWER ✔✔cross
Currency market-makers buy at the ______ price and sell at the ______
______ price. - ANSWER ✔✔bid; higher ask
From the U.S. perspective, a(n) ______ forward quote is in ______
terms. - ANSWER ✔✔-Direct, American
-Indirect; European
Which are the tiers of the foreign exchange market? - ANSWER ✔✔-
Wholesale or interbank market
-Retail or client market
Questions and Answers |
Already Graded A+
Broadly defined, the ______ market includes the conversion of
purchasing power from one currency into another, bank deposits of
foreign currency, the extension of credit denominated in a foreign
currency, foreign trade financing, trading in foreign currency options and
futures contracts, and currency swaps. - ANSWER ✔✔foreign
exchange
The structure of the foreign exchange market is an outgrowth of one of
the primary functions of a(n) ______ banker: to assist clients in the
conduct of international commerce. - ANSWER ✔✔commercial
,The process of using foreign currency reserves to buy one's own
currency in order to decrease its supply and thus increase its value in
the foreign exchange market, or alternatively, selling one's own currency
for foreign currency in order to increase its supply and lower its price is
referred to as ______. - ANSWER ✔✔intervention
From the U.S. perspective, a(n) ______ quotation is the price of one
U.S. dollar in the foreign currency. - ANSWER ✔✔indirect
Saudi Arabia's currency - ANSWER ✔✔riyal
South Africa's currency - ANSWER ✔✔rand
Thailand's currency - ANSWER ✔✔baht
Singapore's currency - ANSWER ✔✔dollar
South Korea's currency - ANSWER ✔✔won
Turkey's currency - ANSWER ✔✔lira
UK's currency - ANSWER ✔✔pound
Which of the following statements about the foreign exchange market is
correct? - ANSWER ✔✔-It is the largest and most active financial
market in the world
-It is open somewhere in the world 24 hours a day, 365 days a year
,What are ways that cross-exchange rates can be calculated? -
ANSWER ✔✔-The product of an American term and a European term
exchange rate
-The quotient of two American term exchange rates
Foreign exchange is traded in a(n) ______ market, not in a central
marketplace where buyers and sellers congregate. - ANSWER
✔✔over-the-counter
Suppose that the interbank bid for a currency is $1.0543 and the ask is
$1.0545. - ANSWER ✔✔-The big figure for the bid is 1.05
-The retail bid could be 1.0542
international banks - ANSWER ✔✔Financial institutions that buy or
sell foregin currency for their own account to serve retail clients
bank customers - ANSWER ✔✔Multinational corporations, money
managers, and private speculators
nonbank dealers - ANSWER ✔✔Large financial institutions such as
investment banks, mutual funds, pensions, and hedge funds
FX brokers - ANSWER ✔✔Match dealer orders to buy and sell
currencies for a fee, but do not take a position themselves
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, central banks - ANSWER ✔✔A national monetary authority
The currencies that are by convention priced in terms of the U.S. dollar
are said to be in ______ terms (a direct quote from the U.S.
perspective). - ANSWER ✔✔american
The currency of Switzerland is the Swiss ______. - ANSWER
✔✔franc
A zero-risk, zero-investment strategy from which a profit is guaranteed is
called ______. - ANSWER ✔✔arbitrage
A ______-exchange rate is an exchange rate between a currency pair
where neither currency is the U.S. dollar. - ANSWER ✔✔cross
Currency market-makers buy at the ______ price and sell at the ______
______ price. - ANSWER ✔✔bid; higher ask
From the U.S. perspective, a(n) ______ forward quote is in ______
terms. - ANSWER ✔✔-Direct, American
-Indirect; European
Which are the tiers of the foreign exchange market? - ANSWER ✔✔-
Wholesale or interbank market
-Retail or client market
