1) In the foreign exchange market, ________ seek all of their profit from exchange rate changes while ________ seek to profit from simultaneous exchange rate differences in different markets. A) wholesalers; retailers

B) central banks; treasuries

C) speculators; arbitrageurs D) dealers; brokers

2) Foreign exchange ________ earn a profit by a bid-ask spread on currencies they purchase and sell. Foreign exchange ________, on the other hand, earn a profit by bringing together buyers and sellers of foreign currencies and earning a commission on each sale and purchase.

A) central banks; treasuries

B) dealers; brokers

C) brokers; dealers

D) speculators; arbitrageurs

3) A ________ transaction in the foreign exchange market requires an almost immediate delivery (typically within two days) of foreign exchange.

A) spot

B) forward

C) futures

D) none of the above

4) A forward contract to deliver British pounds for U.S. dollars could be described either as ________ or ________.

A) buying dollars forward; buying pounds forward

B) selling pounds forward; selling dollars forward

C) selling pounds forward; buying dollars forward D) selling dollars forward; buying pounds forward

5) A common type of swap transaction in the foreign exchange market is the ________ where the dealer buys the currency in the spot market and sells the same amount back to the same bank in the forward market.

A) "forward against spot"

B) "forspot"

C) "repurchase agreement"

D) "spot against forward"

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6) The ________ is a derivative forward contract that was created in the 1990s. It has the same characteristics and documentation requirements as traditional forward contracts except that they are only settled in U.S. dollars and the foreign currency involved in the transaction is not delivered.

A) nondeliverable forward B) dollar only forward

C) virtual forward

D) internet forward

7) Daily trading volume in the foreign exchange market was about ________ per ________ in 2019.

A) $6,600 billion; month

B) $2,500 billion; month

C) $6,600 billion; day D) $2,500 billion; day

8) Most foreign exchange transactions are through the U.S. dollar. If the transaction is expressed as the foreign currency per dollar this known as ________ whereas ________ are expressed as dollars per foreign unit.

A) European terms; indirect

B) American terms; direct

C) American terms; European terms D) European terms; American terms

9) The following is an example of an American term foreign exchange quote: A) $20/

B) 0.85/$

C) 100/

D) none of the above

10) From the viewpoint of a British investor, which of the following would be a direct quote in the foreign exchange market?

A) SF2.40/

B) $1.50/

C) 0.55/ D) $0.90/