What are the salient features of foreign exchange market?

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What are the salient features of foreign exchange market explain?

The features of the foreign exchange market include it’s high liquidity, transparency, dynamism, 24 hour operation, low transaction cost, and a large bias towards towards the US dollar.

What are the salient features of foreign exchange market in India?

Foreign Exchange Market In India

  • Foreign Exchange Market In India.
  • Features Of Foreign Exchange Market. …
  • 1) Low Trading Cost: …
  • 2) Trading Opportunity For 24 Hours, 5 Days A Week. …
  • 3) High Leverage. …
  • 4) Highly Transparent. …
  • 5) Accessibility Of Forex Market. …
  • 6) High Liquidity.

What are the features of foreign exchange exposure?

Foreign exchange exposure refers to the risk a company undertakes when making financial transactions in foreign currencies. All currencies can experience periods of high volatility which can adversely affect profit margins if suitable strategies are not in place to protect cash flow from sudden currency fluctuations.

What are the main functions of foreign exchange market?

The following are the important functions of a foreign exchange market:

  • To transfer finance, purchasing power from one nation to another. …
  • To provide credit for international trade. …
  • To make provision for hedging facilities, i.e., to facilitate buying and selling spot or forward foreign exchange.
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What is meant by foreign exchange market?

The foreign exchange market (also known as forex, FX, or the currencies market) is an over-the-counter (OTC) global marketplace that determines the exchange rate for currencies around the world.

What are the functions of foreign exchange market Class 12?

Functions of Foreign Exchange Market:

  • Transfer function: It transfers the purchasing power between countries.
  • Credit function: It provides credit channels for foreign trade.
  • Hedging function: It protects against foreign exchange risks.

What are the types of foreign exchange market?

Types Of Foreign Exchange Market

  • The Spot Market. In the spot market, transactions involving currency pairs take place. …
  • Futures Market. …
  • Forward Market. …
  • Swap Market. …
  • Option Market.

What are the advantages of foreign exchange market?

Advantages of Foreign Exchange Market in India

  • Globalized marketplace: There are no geographical or localized constraints in foreign exchange market. …
  • Flexibility: …
  • Full transparency: …
  • Wide range of trading options. …
  • Low transaction costs: …
  • No commission: …
  • Market Volatility: …
  • Hi-tech marketplace.

Why the foreign exchange market is unique?

The foreign exchange market is unique. Factors that make the foreign exchange market unique are its continuous operation, large trading volume, and geographical dispersion. … The foreign exchange is a floating exchange rate rather than a fixed exchange regime.