Question : Which of the following is not a type of foreign exchange market transaction?
Option 1: Spot transaction
Option 2: Forward transaction
Option 3: Option transaction
Option 4: Derivative transaction
Correct Answer: Derivative transaction
Solution :
The correct answer is (d) Derivative transaction.
While spot transactions, forward transactions, and option transactions are all types of foreign exchange market transactions, derivatives transactions encompass a broader category that includes various financial instruments whose value is derived from an underlying asset, such as options, futures, and swaps. While derivatives can be used in foreign exchange trading, they are not exclusively specific to the foreign exchange market and can be utilized in other financial markets as well.
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