ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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three types of currencies.
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two counterparts.
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three parties.
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None of the above
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Detailed explanation-1: -More specifically, foreign exchange transactions include: the spot foreign exchange purchase and sale and foreign exchange transaction business for personal customers; the spot, forward and option-date forward foreign exchange transaction business for corporate customers; and the foreign currency option transaction.
Detailed explanation-2: -What Is a Counterparty? A counterparty is the other party that participates in a financial transaction. Every transaction must have a counterparty in order for the transaction to go through. More specifically, every buyer of an asset must be paired up with a seller who is willing to sell and vice versa.
Detailed explanation-3: -Counterparties are those parties that are a part of a monetary transaction. Each transaction will have a counterparty without which the transaction can not go through. For example, a purchaser of an asset will be up against the seller who is looking to sell his asset, the vice verse as well holds good.
Detailed explanation-4: -A ‘client’ in relation to an OTC derivative provider is a person other than a counterparty, with whom an OTC derivative provider (i), executes an OTC derivative transaction; or (ii) enters into a relationship with the intention of executing OTC derivative transactions.