Most Profits or Losses on FX Trading for FIs Come

question 31

True/False

Most profits or losses on FX trading for FIs come from taking an open position or speculating in currencies.Revenues from market making-the bid-ask spread-or from acting as agents for retail or wholesale customers generally provide only a secondary or supplementary revenue source.

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Definitions:

Deadweight Losses

Economic inefficiencies that occur when equilibrium in a market is not achieved or when market allocation of resources is not optimal, often due to externalities or government intervention.

Consumer Surplus

A rephrased definition: The economic benefit that consumers receive when they can purchase a product for less than the maximum price they are willing to pay.

Consumer Surplus

The gap between the overall sum consumers are ready and able to spend on a product or service and what they really spend.

Cognitive Dissonance

A psychological discomfort experienced when simultaneously holding two or more conflicting beliefs, ideas, or values.