Question

The four types of foreign exchange market participants are

1) buyers, sellers, traders, and manufacturing companies.
2) banks, brokers, customers, and central banks.
3) banks, brokers, traders, and financial companies.
4) banks, brokers, bond underwriters, and securities companies.

Answer 1

In the foreign exchange market, four groups of participants demand and supply currency through financial institutions.

Step-by-step explanation:

In the foreign exchange market, there are four main groups of participants who demand and supply currency: (1) firms involved in international trade, (2) tourists visiting other countries, (3) international investors buying ownership or part-ownership of foreign firms, and (4) international investors making financial investments without ownership. These participants are not directly involved in person-to-person currency trades, but rather transact through financial institutions.