Which of the Following Institutions Is the Most Important Participant

question 8

Multiple Choice

Which of the following institutions is the most important participant in foreign currency markets?

• A)A retail customer
• B)A commercial bank
• C)A foreign exchange broker
• D)A central bank

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Definitions:

Profitability Index

A calculation that determines the relative profitability of an investment by dividing the present value of future cash flows by the initial investment cost.

Average Accounting Return

A financial ratio measuring the average net income an asset is expected to generate relative to its average book value.

Time Value

The principle stating that having money now is preferable to the same sum later, owing to the earnings it could potentially accrue.

Disadvantage

refers to a unfavorable condition or position that reduces the chances of success or effectiveness.