Which of the following is true of the foreign exchange market?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → It is world-wide, though participants have their own trading centres.
Participants in the foreign exchange market may each have their own trading centres, but the market itself is world-wide. The centres stay in close and continuous contact.
Its major participants are commercial banks, foreign exchange brokers, other authorised dealers and monetary authorities, not stock exchanges.
NCERT (2026-27): “6.2 The Foreign Exchange Market … The market in which national currencies are traded for one another is known as the foreign exchange market. The major participants in the foreign exchange market are commercial banks, foreign exchange brokers and other authorised dealers and monetary authorities. It is important to note that although participants themselves may have their own trading centres , the market itself is world-wide. There is a close and continuous contact between the trading centres and the participants deal in more than one market.” |