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Currency Trading Interview Questions & Answers - Learning Mode
COOLINTERVIEW.COM INVESTMENT INTERVIEW QUESTIONS CURRENCY TRADING INTERVIEW QUESTIONS QUESTIONS & ANSWERS - LEARNING MODE

Currency Trading Interview Questions & Answers - Learning Mode

Currency Trading is the act of buying and selling (trading) different currencies of the world. The Foreign Exchange (or Forex) is the market that allows you to trade currencies in volume. The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of volume of trading, it is by far the largest market in the world. The main participants in this market are the larger international banks. Financial centres around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market does not determine the relative values of different currencies, but sets the current market price of the value of one currency as demanded against another.

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Currency Trading Interview Questions & Answers - Learning Mode
Try Currency Trading Interview Questions & Answers - Exam Mode
Question: How are currency prices determined?

Answer: Currency prices are affected by a variety of economic and political conditions, but probably the most important are interest rates, international trade, inflation, and political stability. Sometimes governments actually participate in the foreign exchange market to influence the value of their currencies. They do this either by flooding the market with their domestic currency in an attempt to lower the price or, conversely, buying in order to raise the price. This is known as central bank interv Source: CoolInterview.com
Question: What is Stop Loss order in a Currency Trading Market?

Answer: Stop Loss order in a Currency Trading Market is an order to buy or sell when a given price is reached or passed to liquidate part or all of an existing position. Source: CoolInterview.com
Question: If there is 6 A of current through the filament of a lamp, how many coulombs of charge move through the filament in 1.75 s? A. 10.5 C B. 105 C C. 3.4 C D. 34 C

Answer: One Cancels the Other (OCO) Order in a Currency Trading Market is a combination of two orders in which the execution of either one automatically cancels the other. Source: CoolInterview.com
Question: In a series RLC circuit that is operating above the resonant frequency, the current A. lags the applied voltage B. leads the applied voltage C. is in phase with the applied voltage D. is zero

Answer: The last trading day of a futures contract on MCX-SX shall be two working days prior to the last working day (excluding Saturdays) of the month. The settlement price is the Reserve Bank of India's reference rate on the last trading day Source: CoolInterview.com
Question: What is Closing a position in a Currency Trading Market?

Answer: Closing a position in a Currency Trading Market is the process of selling or buying a foreign exchange position resulting in the liquidation (squaring up) of the position. Source: CoolInterview.com
Question: Who is Chartist in a Currency Trading Market?

Answer: Chartist in a Currency Trading Market is a person who attempts to predict prices by analyzing past price movements as recorded on a chart. Source: CoolInterview.com
Question: What is Hedge in a Currency Trading Market?

Answer: Hedge in a Currency Trading Market is a transaction that reduces the risk on an existing investment position. Source: CoolInterview.com
Question: What are the benefits of trading in Currency Derivatives?

Answer: Currency Derivatives are very efficient risk management instruments and you can derive the below benefits:

i. Hedging: You can protect your foreign exchange exposure in business and hedge potential losses by taking appropriate positions in the same. For e.g. If you are an importer, and have USD payments to make at a future date, you can hedge your foreign exchange exposure by buying USDINR and fixing your pay out rate today. You would hedge if you were of the view that USDINR was going to Source: CoolInterview.com
Question: What is Sequence clustering algorithm?

Answer: Ask in a Currency Trading Market is the price at which a currency pair or security is offered for sale; the quoted price at which an investor can buy a currency pair. This is also known as the "offer", "ask price", and "ask rate". Source: CoolInterview.com
Question: What is Maturity in a Currency Trading Market?

Answer: Maturity in a Currency Trading Market is the date on which payment of a financial obligation is due. Source: CoolInterview.com
Question: What is Market Close in a Currency Trading Market?

Answer: Market Close in a Currency Trading Market refers to the time of day that a market closes. In the 24 hour-a-day foreign exchange market, there is no official market close. 5:00 PM EST is often referred to and understood as the market close because value dates for spot transactions change to the next new value date at that time. Source: CoolInterview.com
Question: What are the factors that affect the exchange rate of a currency?

Answer: "A country's currency exchange rate is typically affected by the supply and demand for the country's currency in the international foreign exchange market. The demand and supply dynamics is principally influenced by factors like interest rates, inflation, trade balance and economic & political scenarios in the country. The level of confidence in the economy of a particular country also influences the currency of that country." Source: CoolInterview.com
Question: How do exchange-traded currency futures enable hedging?

Answer: On a currency exchange platform, you can buy or sell currency futures. If you are an importer, you can buy futures to "lock in" a price for your purchase of actual foreign currency at a future 10 date. You thus avoid exchange rate risk that you would otherwise have faced. On the other hand, if you are an exporter, you sell currency futures on the exchange platform and "lock in" a sale price at a future date. However, it may be noted that the contract will be marked to market at the daily settlem Source: CoolInterview.com
Question: What is Buy in a Currency Trading Market?

Answer: Buy in a Currency Trading Market is an opening of a long and a closure of a short positions. Source: CoolInterview.com
Question: What is Euro in a Currency Trading Market?

Answer: Euro in a Currency Trading Market is the national currency of EU countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Slovenia, the Netherlands, Portugal and Spain. In circulation since 2002. Source: CoolInterview.com
Question: What is Liquidation in a Currency Trading Market?

Answer: Liquidation in a Currency Trading Market is the closing of an existing position through the execution of an offsetting transaction. Source: CoolInterview.com
Question: What is Margin Trading in a Currency Trading Market?

Answer: Margin Trading in a Currency Trading Market is the trading with the use of leverage. For instance, having a deposit of 100$ and 1:3 leverage allows a client to make deals with the total price of 400$. Source: CoolInterview.com
Question: What is Necessary Margin in a Currency Trading Market?

Answer: Necessary Margin in a Currency Trading Market is the guarantee (in monetary expression), which is required by the dealer to maintain an open position. Source: CoolInterview.com
Question: What is Hedged Margin in a Currency Trading Market?

Answer: Hedged Margin in a Currency Trading Market is the guarantee (expressed in monetary terms), which is required by the dealer to maintain an open locked position or locked position that the client intends to open. Each tool has its own margin. Source: CoolInterview.com
Question: What is LIBOR (London Interbank Offered Rate) in a Currency Trading Market?

Answer: LIBOR (London Interbank Offered Rate) in a Currency Trading Market is the average weighted interest rate on interbank loans provided by banks, that participate in the London interbank market and offer funds in different currencies for different time periods (from 1 day to 1 year). The British Banking Association has been putting rates on record since 1985. Source: CoolInterview.com

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