Test your basic knowledge |

Foreign Exchange Essentials

Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. A downward slope that represents stock-USD relationship means that stock price is losing ______ - so you are losing money






2. In a GBP-USD relationship - when the line in a graph is upward slope it means the __________ overtime because the exchange rate is getting bigger






3. What are the four major FX accounting guidances?






4. An ___________ expresses the value of one currency relative to another






5. What is the purpose of hedging?






6. The offset of revaluation is recorded to...






7. What is Revaluation?


8. Direct quote- _____________=USD






9. Effective Hedge Rate is ________________ of all outstanding FX contracts for the quarter being hedged






10. Where are revaluations done?






11. In a EUR-USD relationship - when arrow is going up means Euro is strengthening and Dollar...






12. What are monetary accounts?






13. When looking at a currency chart - you need to know if the currency is quoted Directly or Indirectly to be able to describe...






14. A forward happens in...






15. The currency ticker for the Sweden Kroner is?






16. Australian currency code is...






17. What are the exceptions to the ticker naming convention?






18. What are some of the reason not hedge at all or partially hedge in a few countries?






19. A Spot happens in...






20. How do you read EUR-USD = 1.40






21. Give some examples of countries where its hard to hedge?






22. Forward points is equal to...






23. In a downward slope that represents USD-JPY relationship a _____________ means that if you bough Japanese Yen at point A you made money at point B






24. What is Fair Value hedge program used for?






25. What is cash flow used for?






26. In a stock-USD relationship - when arrow is going up means that stock is becoming more ______ against dollar






27. How is the price of the forward contract determined?






28. How many currencies use Direct method of quoting?






29. The timing of when we execute hedges drastically impacts the ____________ we achieve






30. The rules for adding or subtracting forward points depend on whether it is quoted...






31. If 1 pizza = 15 USD then ____ = 1/15 pizza






32. If 1 case = 30 USD and 1 pizza = 15 USD - then What is 1 case = ?






33. In a USD-JPY relationship - when the line in a graph is upward slope it means the yen is weakening and dollar is strenghtening because exchange rate...






34. The Foreign Exchange market is the __________ market in the world






35. What rate is used to book daily transactions?






36. In a stock-USD relationship - when arrow is going down means that stock is becoming ____ valuable against dollar






37. Treasury is responsible for banking requirements - funding for the business and managing...






38. What is the trading in volume for FX?






39. What is currency Translation?


40. We do not speculate on Foreign Exchange - 10-K says it is to reduce the impact of...






41. Hedge rate is constant throughout quarter while _______________ changes throughout quarter






42. How far in advance do we hedge?






43. ____________ is used for translation of foreign currency P&L to Reporting currency?






44. ____________ - foreign currency/rate = USD






45. Functional currency of an entity is determined by Treasury Accounting based on ______ requirements






46. Give an example of one way to hedge a price increase in gas prices...






47. A downward slope that represents AUD-USD relationship means that if you bought Australian dollars at point A - you have _____ money at point B






48. Forward points multiply the exchange rate by the...






49. The current market price for any currency pair is referred to as ?






50. Hedge Rate is _______________ that will be achieved on a specific quarter's cash flow