#1
What is the primary function of the foreign exchange market?
To facilitate the buying and selling of foreign currencies
ExplanationFacilitates currency exchange
#2
Which of the following is NOT a major participant in the foreign exchange market?
Stock exchanges
ExplanationStock exchanges are not involved
#3
What is the role of a currency pair in foreign exchange trading?
To represent the relative value of two currencies
ExplanationShows relative currency value
#4
Which of the following is NOT a major currency in the forex market?
Rupee
ExplanationRupee is not a major currency
#5
What is the role of a forex broker in currency trading?
To facilitate trades between buyers and sellers in the forex market
ExplanationFacilitates trades between buyers and sellers
#6
Which of the following is NOT a major currency pair in forex trading?
AUD/CAD
ExplanationAUD/CAD is not a major pair
#7
What does the term 'pip' refer to in forex trading?
Price interest point
ExplanationRefers to price interest point
#8
Which of the following factors does NOT typically influence exchange rates?
Weather conditions
ExplanationWeather conditions do not influence rates
#9
What is the significance of the bid-ask spread in forex trading?
It shows the difference between the buying and selling prices
ExplanationIndicates buying and selling price difference
#10
What does the term 'liquidity' refer to in forex markets?
The ease with which an asset can be converted into cash without affecting its market price
ExplanationEase of asset conversion without price impact
#11
What is the primary function of a central bank in relation to foreign exchange markets?
To conduct monetary policy and regulate interest rates
ExplanationMonetary policy and interest rate regulation
#12
In forex trading, what does 'long' and 'short' refer to?
'Long' refers to buying a currency pair in anticipation of its value increasing, while 'short' refers to selling a currency pair expecting its value to decrease
ExplanationLong: buy, Short: sell
#13
What is a 'carry trade' in forex trading?
A strategy involving borrowing in a low-interest-rate currency and investing in a high-interest-rate currency
ExplanationInvolves borrowing low, investing high