Question

What is the main objective of the foreign exchange market?

a.

To facilitate international trade in goods and services

b.

To determine exchange rates between two countries

c.

To permit transfer of purchasing power between currencies

d.

To regulate global financial transactions

Answer: (c).To permit transfer of purchasing power between currencies Explanation:The primary goal of the foreign exchange market is to enable the transfer of purchasing power denominated in one currency to another, facilitating trade between countries.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is the main objective of the foreign exchange market?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. How is the exchange rate defined?

Q. What role does the foreign exchange market play?

Q. In the context of the foreign exchange market, what does "invoicing in a single currency" mean?

Q. In the foreign exchange market, what primarily determines the trading of currency pairs?

Q. What is the basis for most foreign exchange market transactions?

Q. In the foreign exchange market, when are inter-bank transactions typically carried out during the week?

Q. What is the term used to describe the relative value of one currency against another in foreign exchange trading?

Q. What is the date on which foreign exchange transactions take place called?

Q. What are the countries where foreign exchange trading occurs referred to as?

Q. What is the term used for banks located in countries different from the settlement locations but involved in foreign exchange transactions?

Q. What is a Spot Transaction in the context of the Foreign Exchange Market?

Q. In a Spot Transaction, what is the settlement date for currencies like the US dollar, Canadian Dollar, or Russian Ruble?

Q. What is the purpose of the two-day time lag in a Spot Transaction settlement date?

Q. How is the settlement date determined in a Forward Transaction of currencies?

Q. What happens if the value date or settlement date of a Forward Transaction falls on a holiday?

Q. How do banks handle maturity periods in non-whole number months for Forward Transactions?

Q. What is a Swap Transaction in the context of the Foreign Exchange Market?

Q. What is the hybrid nature of a Swap Transaction?

Q. What are the two types of Swap Transactions?

i. Spot-Forward transaction
ii. Forward-Forward transaction
iii. Spot-Swap transaction
iv. Swap-Swap transaction

Q. What percentage of transactions in the foreign exchange market are Swap Transactions according to the recent study?

Recommended Subjects

Are you eager to expand your knowledge beyond IC 89 Management Accounting? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!