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- 1. Multiple Choice
____ is a factor that affects the bid/ask spread.
Order costs
Volume
Competition
All of the above
- 2. Fill in the Blank
The price for which a bank offers to sell a currency
- 3. Multiple Choice
____ is not a bank characteristic important to customers in need of foreign exchange.
Size of the bank.
Quote competitiveness
Speed of execution
Advice about current market conditions
- 4. Multiple Choice
The bid-ask spread on an exchange rate can be used to directly determine:
how an exchange rate will change.
the transaction cost of foreign exchange.
the forward premium.
the currency option premium.
- 5. Multiple Choice
A cross exchange rate expresses the amount of one foreign currency per unit of another foreign currency.
True
False
- 6. Multiple Choice
A quotation representing the value of a foreign currency in dollars is referred to as a(n) ____ quotation; a quotation representing the number of units of a foreign currency per dollar is referred to as a(n) ____ quotation. (From US perspectives).
direct; indirect
indirect; direct
direct; direct
indirect; indirect
- 7. Multiple Choice
Forward market is a market for immediate exchange.
True
False
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