SIE Exam Question 288: Answer and Explanation

Question: 288

A customer wants to exchange her US Dollars for Euros. What will determine how many Euros she receives for her Dollars?

• A. The amount of euros received will depend on the equity market conditions on the major European exchanges such as the CAC & FTSE
• B. The interest rate differential between the 2 central banks - the Federal Reserve and the ECB
• C. The nearby euros futures contract
• D. The spot forex exchange rate

Correct Answer: D

Explanation:

D: The currency conversion rate will be determined by the EUR USD exchange rate in the spot forex currency market.