FOREX Test Guide Questions and Answers

Forex markets - ANSWER-The forex markets is the crossroads for international capital, the intersection through which global and investment flows have to move. Global financial investment flows dominate trade as the primary non speculative source of forex market volume. Forex market is a traders market - ANSWER-It's a market that's open around the clock. Six days a week, Enabling traders to act on news and events as they happen. Liquidity - ANSWER-the level of market interest - the level of buying and selling volume. available for any given moment for a particular asset or security. The higher the liquidity the deeper the market, the faster and easier it is to buy and sell a security. Asia-Pacific Session - ANSWER-Currency volume in the Asia-Pacific session accounts for about 21% of total daily global volume. Spot transactions - ANSWER-Spot transactions are single outright transactions that involve the exchange of two currencies at a rate agreed to on the date of the contract for value or delivery within typically two business days Outright forwards - ANSWER-Outright forwards involve the exchange of two currencies at a rate agreed to on the date of the contract for value or delivery at some time in the future. This category also includes forward foreign exchange agreement (FXA) transactions, non-deliverable forwards (NDFs) and other forward contracts for differences. Foreign exchange swaps - ANSWER-Foreign exchange swaps involve the exchange of two currencies on a specific date at a rate agreed to at the time of the conclusion of the contract, and a reverse exchange of the same two currencies on a future date at a rate agreed to at the time of the contract. For measurement purposes, only the long leg of the swap is reported, so that each transaction is recorded only once. currency swaps - ANSWER-Currency swaps involve the exchange of fixed or floating interest payments in two different