Forex Trading Forex Trading Fundamentals

Question 1

What does the term 'pip' stand for in Forex trading?

Accepted Answer

Percentage in Point

Answer

Price Interest Point

Answer

Profit in Position

Answer

Purchase in Pairs

Question 2

Which of the following is the most actively traded currency pair in the Forex market?

Accepted Answer

EUR/USD

Answer

GBP/USD

Answer

USD/JPY

Answer

AUD/USD

Question 3

What is the Forex market's primary function?

Accepted Answer

Enabling currency exchange and price discovery

Answer

Facilitating stock trading

Answer

Regulating international trade tariffs

Answer

Setting global interest rates

Question 4

What is a 'lot' in Forex trading?

Accepted Answer

A standard unit of trade size

Answer

A group of currency pairs

Answer

A type of stop-loss order

Answer

A broker's commission fee

Question 5

In a currency pair such as USD/JPY, which currency is the 'base currency'?

Accepted Answer

USD

Answer

JPY

Answer

Both equally

Answer

Neither — it depends on the broker

Question 6

What does 'leverage' allow a Forex trader to do?

Accepted Answer

Control a larger position with a smaller amount of capital

Answer

Trade without a broker

Answer

Avoid paying spreads

Answer

Lock in a guaranteed profit