ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is NOT an example of a participant in the foreign exchange market?
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Pakistani tourists exchanging rupees for British pounds at London’s Heathrow airport
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Toyota exporting cars to Canada from factories in Japan
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the British government when it arranges a multimillion-pound loan to provide assistance to Bangladesh
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the British retailer Marks and Spenser purchasing appliances from a British supplier
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Explanation:
Detailed explanation-1: -Expert-Verified Answer Option d is the correct answer. Investments is not a function of foreign exchange market. Foreign exchange market is the market where foreign currency are sold and bought.
Detailed explanation-2: -The foreign exchange market performs credit, hedging, and transfer functions.
Detailed explanation-3: -Arbitrageurs who seek to earn riskless profits by taking advantage of differences in interest rates among countries. Traders who use forward contracts to eliminate possible exchange losses on export or import orders denominated in foreign currencies.
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