50+ Foreign Exchange Market MCQ’s | (Free Resource) Business Economics

21. The modern foreign exchange market operates under _______ rate system.
a) floating
b) fixed
c) highly managed float
d) all of the above

22. In exchange rate determination, the first currency in the currency pair is called _______ currency.
a) base
b) soft
c) negotiable
d) hard

23. __________ is a feature of foreign exchange market.
a) operates 24 hours for 5 day in a week
b) operates 24 hours for all 7 days in a week
d) operates365 days in a year
d) none of the above

24. ________ is not a feature of foreign exchange market.
a) Limited Geographical Coverage
b) Highly Liquid Market
c) Huge Value Market
d) None of the above

25. _________ enables an investor to earn high returns while minimizing capital risks.
a) Leverage
b) Liquidity
c) Reserves
d) all of the above

26. Transactions in foreign exchange market have become quicker due to _________ .
a) advanced technology
b) Government Initiatives
c) IMF
d) World Bank

27. Society for Worldwide Interbank Financial Telecommunications(SWIFT) is a ________ communication network that facilitates 24-hour secure international exchange of payment instructions between banks,central banks, multinational corporations, and major securities firms.
a) Global
b) Local
c) National
d) None of the above

28. The function of foreign exchange market that helps in clearing international transactions is known as _______ .
a) transfer
b) credit
c) hedging
d) speculation

29. Provision of documentary bills of exchange in international payments is an example of ________ function.
a) creation of credit
b) transfer
c) speculation
d) hedging

30. The function of foreign exchange market, which is concerned with fixing of forward exchange rates is known as __________ .
a) Hedging
b) speculation
c) arbitrage
d) transfer)

Answers: 21)floating 22)base 23)operates 24 hours for 5 day in a week 24)Limited Geographical Coverage 25)Leverage 26)advanced technology 27)Global 28)transfer 29)creation of credit 30)Hedging