Question

true or false ?

1) Since the global financial crisis of 2008-2009, the Chinese renminbi (yuan) has become the most widely traded currency with the U.S. dollar surpassing the euro, yen, and pound as dollar trading pairs.

2) Swap and forward transactions account for an insignificant portion of the foreign exchange market.

3) The European and American terms for foreign currency exchange are square roots of one another.

4) When the cross rate for currencies offered by two banks differs from the exchange rate offered by a third bank, a triangular arbitrage opportunity exists.

5) The most commonly quoted currency exchange is that between the U.S. dollar and the European euro. For example, a quotation of EUR/USD 1.2174. The euro is the base currency and the dollar the price currency.

Answer 1

Answer:

(1) Since the global financial crisis of 2008-2009, the Chinese renminbi (yuan) has become the most widely traded currency with the U.S. dollar surpassing the euro, yen, and pound as dollar trading pairs. - FALSE
(2) Swap and forward transactions account for an insignificant portion of the foreign exchange market. - FALSE
(3) The European and American terms for foreign currency exchange are square roots of one another. - FALSE
(4) When the cross rate for currencies offered by two banks differs from the exchange rate offered by a third bank, a triangular arbitrage opportunity exists. - TRUE
(5) The most commonly quoted currency exchange is that between the U.S. dollar and the European euro. For example, a quotation of EUR/USD 1.2174. The euro is the base currency and the dollar the price currency. - TRUE