Exam 2: The Foreign Exchange Market

The cash manager at AmFlex Company needs to buy 1,000,000 British pounds to pay a British supplier.A currency broker quotes him a bid-ask rate of ?.4865-.5116/US$.What will be the dollar cost the 1,000,000 pounds?

Describe how an exchange rate is like a market price?

How would economists most often define a perfectly competitive market?

If you were trading currency in the New York currency market,the exchange rate between two currencies not expressed in U.S.dollars would be known as the ________ quote.

The CFO at SmithKlone Company receives a lump sum payment from a foreign vendor of 2,000 euros and intends to convert them to US$.When she calls her currency broker,the quote given is €.6250-.6667/US$.What can she expect to realize in US$ from the broker?

When it comes to trading global currency,all of the following markets are in the top five EXCEPT:

Eastern Copper Mines of New Zealand has called a broker at Deutsche Bank to ask her opinion about the Japanese yen to New Zealand dollar exchange rate.What would the broker's answer be?

The fourth decimal place in a dealer's quote in the trade jargon is known as the

When transactions are conducted on the spot currency markets,________ business day(s)is(are)allowed for contract settlement.

What do the market makers in the currency markets provide?

What is most different about the foreign exchange market versus the New York Stock Exchange?

Why are the bid-ask spreads quoted in the interbank spot market? What is their purpose?