Match the following :
List – I List – II a. Banks that conduct trading in market for Euro currencies 1. Euro currencies b. Deposits denominated and payable in dollars and other foreign currencies in banks outside USA 2. SDRs c. Dollar deposits located in banks outside US 3. Euro banks d. Currency baskets composed of five currencies of IMF members 4. Euro dollars
Codes :
a-3, b-1, c-4, d-2
Matching Financial Market Terms
This section matches financial terms from List I with their correct definitions in List II.
Understanding the Terms:
- a. Banks that conduct trading in market for Euro currencies are known as Euro banks (3). These banks facilitate currency trading outside the home country of the currency.
- b. Deposits denominated and payable in dollars and other foreign currencies in banks outside USA represent Euro currencies (1). This is a broad category for currencies held outside their country of origin.
- c. Dollar deposits located in banks outside US specifically refers to Euro dollars (4). This is a specific type of Euro currency focusing on US dollars held in foreign banks.
- d. Currency baskets composed of five currencies of IMF members are SDRs (2) (Special Drawing Rights), an international reserve asset.
Final Matching:
The correct matches are:
- a - 3 (Euro banks)
- b - 1 (Euro currencies)
- c - 4 (Euro dollars)
- d - 2 (SDRs)
This combination aligns with Option B.
Important Questions from Foreign exchange market
Currency depreciation in the Indian Rupee in recent times has largely been attributed to:
A. Declining domestic savings
B. Increasing FDI flows
C. Portfolio outflows
D. Higher currency circulation
E. Higher imports and debt servicing
Choose the correct answer from the options given below:
Match the items of List I with the items of List II and choose the correct answer from the code given below.
List – I
List – II
a
Floating forex rate
i
Get the best out of extreme decentralisation and centralisation in finance decision and execution
b
Transaction effect of change in forex rate
ii
Influences time lag in receipt of cash against foreign currency denominated invoices
c
Transaction effect of fluctuation in forex rate
iii
Influences the valuation of financial statements and reported items
d
Geocentric solution in financial planning and control
iv
Triggers problems of appreciation or depreciation of currencies
- Which one of the following instruments is often used to protect the value of a foreign currency denominated transaction?
- Hedging in the foreign exchange market refers to :
- Which of the following is related with optimum currency area ?
