Financial Info Management Test Bank
1. The world 's largest foreign exchange trading center is
A. New York.
B. Tokyo.
C. London.
D. Hong Kong.
Topic: Function and Structure of the FX Market 2. On average, worldwide daily trading of foreign exchange is
A. impossible to estimate.
B. $15 billion.
C. $504 billion.
D. $3.21 trillion.
Topic: Function and Structure of the FX Market 3. The foreign exchange market closes
A. Never.
B. 4:00 p.m. EST (New York time).
C. 4:00 p.m. GMT (London time).
D. 4:00 p.m. (Tokyo time).
Topic: Function and Structure of the FX Market
4. Most foreign exchange transactions are for
A. intervention by central banks.
B. interbank trades between international banks or nonbank dealers.
C. retail trade.
D. purchase of hard currencies.
Topic: FX Market Participants 5. The difference between a broker and a dealer is
A. dealers sell drugs; brokers sell houses.
B. brokers bring together buyers and sellers, but carry no inventory; dealers stand ready to buy and sell from their inventory.
C. brokers transact in stocks and bonds; currency is bought and sold through dealers.
D. none of the above
Topic: FX Market Participants 6. Most interbank trades are
A. speculative or arbitrage transactions.
B. simple order processing for the retail client.
C. overnight loans from one bank to another.
D. brokered by dealers.
Topic: FX Market Participants 7. At the wholesale level
A. most trading takes place OTC between individuals on the floor of the exchange.
B. most trading takes place over the phone.
C. most trading flows over Reuters and EBS platforms.
D. most trading flows through specialized "broking" firms.
Topic: FX Market Participants
8. Intervention in the foreign exchange market is the process of
A. a central bank requiring the commercial banks of that country to trade at a set price level.
B. commercial banks in different countries coordinating efforts in order to stabilize one or
A. New York.
B. Tokyo.
C. London.
D. Hong Kong.
Topic: Function and Structure of the FX Market 2. On average, worldwide daily trading of foreign exchange is
A. impossible to estimate.
B. $15 billion.
C. $504 billion.
D. $3.21 trillion.
Topic: Function and Structure of the FX Market 3. The foreign exchange market closes
A. Never.
B. 4:00 p.m. EST (New York time).
C. 4:00 p.m. GMT (London time).
D. 4:00 p.m. (Tokyo time).
Topic: Function and Structure of the FX Market
4. Most foreign exchange transactions are for
A. intervention by central banks.
B. interbank trades between international banks or nonbank dealers.
C. retail trade.
D. purchase of hard currencies.
Topic: FX Market Participants 5. The difference between a broker and a dealer is
A. dealers sell drugs; brokers sell houses.
B. brokers bring together buyers and sellers, but carry no inventory; dealers stand ready to buy and sell from their inventory.
C. brokers transact in stocks and bonds; currency is bought and sold through dealers.
D. none of the above
Topic: FX Market Participants 6. Most interbank trades are
A. speculative or arbitrage transactions.
B. simple order processing for the retail client.
C. overnight loans from one bank to another.
D. brokered by dealers.
Topic: FX Market Participants 7. At the wholesale level
A. most trading takes place OTC between individuals on the floor of the exchange.
B. most trading takes place over the phone.
C. most trading flows over Reuters and EBS platforms.
D. most trading flows through specialized "broking" firms.
Topic: FX Market Participants
8. Intervention in the foreign exchange market is the process of
A. a central bank requiring the commercial banks of that country to trade at a set price level.
B. commercial banks in different countries coordinating efforts in order to stabilize one or