1. What is the primary function of a Forex broker?
A) To trade stocks
B) To provide access to the Forex market
C) To create currency
D) To manage government bonds
Answer: B) To provide access to the Forex market
2. Which type of Forex broker takes the other side of client trades?
A) ECN broker
B) Market maker
C) STP broker
D) Discount broker
Answer: B) Market maker
3. What does ECN stand for in Forex trading?
A) Electronic Currency Network
B) Electronic Communication Network
C) Enhanced Currency Network
D) Economic Currency Network
Answer: B) Electronic Communication Network
4. Which platform is widely used for Forex trading?
A) MetaTrader 4
B) Adobe Photoshop
C) Microsoft Word
D) Google Chrome
Answer: A) MetaTrader 4
5. What is leverage in Forex trading?
A) A type of currency
B) The ability to control a larger position with a smaller amount of capital
C) The amount of money needed to open an account
D) A tool to predict market movements
Answer: B) The ability to control a larger position with a smaller amount of capital
6. Which of the following is a feature of a Forex trading platform?
A) Social media integration
B) Trading chart analysis tools
C) Video editing software
D) Email services
Answer: B) Trading chart analysis tools
7. What does a “spread” refer to in Forex trading?
A) The difference between the highest and lowest price of a currency pair
B) The difference between the bid and ask price
C) The total amount of trades in a day
D) The interest rate offered by a broker
Answer: B) The difference between the bid and ask price
8. What is the purpose of a demo account offered by Forex brokers?
A) To allow users to trade real money
B) To provide a platform for practicing trading without financial risk
C) To charge users for premium features
D) To collect personal information from users
Answer: B) To provide a platform for practicing trading without financial risk
9. Which regulatory body oversees Forex brokers in the United States?
A) SEC
B) CFTC
C) FDIC
D) NFA
Answer: B) CFTC
10. What is slippage in Forex trading?
A) A sudden change in the price of a currency
B) The delay in execution of an order, causing a different price than expected
C) A type of order that guarantees the price
D) A bonus given by brokers
Answer: B) The delay in execution of an order, causing a different price than expected