If a currency's spot rate market is ____, its exchange rate is likely to be ____ to a single large purchase or sale transaction.
A)liquid; highly sensitive
B)illiquid; insensitive
C)illiquid; highly sensitive
D)none of the above

Question

Quizplus · Accepted Answer

In an illiquid market, there are fewer buyers and sellers. This means that a single large purchase or sale can significantly impact the exchange rate, making it highly sensitive to such transactions.

If a Currency's Spot Rate Market Is ____, Its Exchange