The investment adviser based in Sydney, Australia, makes the following statements to her client when describing some

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The investment adviser based in Sydney, Australia, makes the following statements to her client when describing some of the basic characteristics of the FX market:

Statement 1 “FX transactions for spot settlement see the most trade volume in terms of average daily turnover because the FX market is primarily focused on settling international trade flows.”

Statement 2 “The most important FX market participants on the buy side are corporations engaged in international trade; on the sell side they are the local banks that service their FX needs.”

1. Statement 1 is:

A. correct.

B. incorrect with respect to the importance of spot settlements.

C. incorrect both with respect to the importance of spot settlements and international trade flows.

2. Statement 2 is:

A. correct.

B. incorrect with respect to corporations engaged in international trade.

C. incorrect with respect to both corporations and the local banks that service their trade needs.

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