Question

If Toranaga-san, who works for a Japanese trading company that operates in Japanese yen, wanted to purchase Spanish castanets from a company in Barcelona and needed Euros to complete the transaction, he would use the ________ to gain access to spot Euros.

A) stock market
B) foreign-exchange market
C) New York Stock Exchange
D) international export market

Answer 1

Answer:

(B) foreign-exchange market

Explanation:

The foreign-exchange market is a market where currencies are traded. Thus, for Toranaga-san, a Japanese, to purchase goods from a Spanish company, he needs to  exchange his Japanese Yen for Euros in the foreign exchange market in order to make the purchase.

Option A is incorrect as the stock market is a market where shares which represents ownership stakes in companies are traded. Option C is incorrect as the New York Stock Exchange is a stock market and is not located within the reach of Toranaga-san. Option D is incorrect as the international export market is a market for export items, but currencies (from the foreign exchange market) are still required for exchange in the market.