Rollover

Question 1

For positions open at brokers “cut-off time,” there is a daily _____________ __________ that a trader ________ or ________ depending on the position they have open

Answer 1

rollover fee; earns; pays

Question 2

Interest is paid on currency _____________:

Answer 2

borrowed

Question 3

Interest is earned on currency __________:

Answer 3

bought

Question 4

What is a rollover fee also known as?

Answer 4

Swap fee

Question 5

What does it mean to buy a currency with a higher interest rate than the other?

Answer 5

It means a trader is borrowing.

Question 6

In what scenario would the net interest rate differential be positive and a trader earns interest as a result?

Answer 6

When a trader buys a currency with a higher interest rate than the other they are borrowing

Question 7

If the interest rate differential is negative then a trader will have to ______________:

Answer 7

pay

Question 8

Describe a interest rate differential in Forex:

Answer 8

the difference between the interest rate of two currencies that are paired together in a currency trade.

Question 9

Retail forex brokers based their rollover rates based on only one factor.
True or False

Answer 9

False, different factors are taken into account.

Question 10

Central Bank interest rates:

Answer 10

used by the country’s central banking institution to lend short-term money to the country’s commercial bank