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Which of the following statements about the foreign exchange markets is incorrect? A. Much of the...

Which of the following statements about the foreign exchange markets is incorrect? A. Much of the trading volume in the FX markets can be described as speculative transactions. B. Most foreign-exchange trading takes place in London. C. The FX markets are over-the-counter markets. D. Trading volume worldwide exceeds USD 4000 billion per day.

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Answer #1

A. much of the trading volume in the FX market can be described as speculative transaction: Correct - almost 90% of the daily trading volume in the FX market is traded as speculative transaction. These transactions are done either with the purpose of hedging the risk of to earn arbitage profits.

B. Most foreign exchange trading takes place in London: correct- London has the worlds largest FX market of the world which deals with atleast 37% of the world wide FX transactions.

C. The FX market are over - the - counter markets. - Correct. FX market is the globalised over the counter market.

D. Trading volume worldwide exceeds USD 4000 billion per day - Incorrect. trading volume in FX market do exceed USD 4000 billion every day but its goes on and average upto 5 trillions or say 5000 billion per day.

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