If a currency's spot 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) liquid; insensitive
D) none of the above

Question

Quizplus · Accepted Answer

A liquid market has many buyers and sellers, so a single large transaction is less likely to affect the exchange rate significantly.

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