Economics · Foreign Exchange Market
Which of the following statements regarding the types of transactions and operational structure of the foreign exchange market is INCORRECT?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Currency futures are standardized forward contracts that are traded on organized exchanges rather than through over-the-counter client markets.
- 2Spot transactions involve the exchange of currencies where final settlement typically occurs on the same business day the agreement is made.✓
- 3Swap transactions involve the simultaneous spot purchase and forward sale of a currency, primarily used to manage liquidity and exchange rate risk.
- 4The foreign exchange market is a global, decentralized market that operates electronically twenty-four hours a day, five days a week.
Correct answer
Spot transactions involve the exchange of currencies where final settlement typically occurs on the same business day the agreement is made.
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