ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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among residents of the same country
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between residents of two different countries
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between residents of two or more countries
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none of the above
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Detailed explanation-1: -The Foreign Exchange Transactions refers to the sale and purchase of foreign currencies. Simply, the foreign exchange transaction is an agreement of exchange of currencies of one country for another at an agreed exchange rate on a definite date.
Detailed explanation-2: -Foreign Exchange Transaction or “FX Transaction”means a transaction providing for the purchase of an agreed amount in one currency by one party to such transaction in exchange for the sale by it of an agreed amount in another currency to the other party to such transaction.
Detailed explanation-3: -Foreign-exchange transactions are settled via correspondent banks or via CLS, which is an international system for settlement of such transactions.
Detailed explanation-4: -The correct answer is c) autonomous transactions. Foreign exchange transactions which are independent of other transactions in the Balance of Payments Account are called autonomous transactions.
Detailed explanation-5: -Three are three key types of forex markets: spot, forward, and futures.