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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. How is the hedge rate variance calculated?






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






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






4. A downward slope that represents stock-USD relationship means that stock price is losing ______ - so you are losing money






5. What is Fair Value hedge program used for?






6. Treasury is responsible for managing companies funds and determining the firms'...






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






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






9. What instruments do we use to hedge?






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






11. USD-JPY account for ____ of trading FX volume






12. What are non-monetary accounts?






13. Whether the quote was indirect or direct - they are all stored as ______ in Oracle






14. If you are an American planning a trip to Europe - which exchange rate would you rather have to convert your US Dollars to Euro? 1.40 or 1.60?






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






16. Treasury ensures that companies have ____________ to meet its obligations






17. US Treasuries is the second highest trading volume accounting for...






18. What is the ticker symbol for Brazilian Real?






19. What rate is used to book daily transactions?






20. A ____________________ is an exchange of two currencies at a fixed rate for any date other than spot delivery






21. What is reporting currency?






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






23. Revaluation can be hedged - while ___________ cannot be hedged






24. What currencies use Direct method of quoting?






25. 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...






26. Australian currency code is...






27. What dictates minimum and maximum hedge percentages?






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






29. EUR-USD currency pair accounts for about ____ of all FX volume






30. How many currencies use Direct method of quoting?






31. Direct quote- _____________=USD






32. The ______________ for a currency normally uses the first two digits to identify the country - and the last digit to identify the currency






33. __________ is used for translation of foreign currency B/S to reporting currency






34. Hedging instrument used in cash flow program is...






35. What is the purpose of hedging?






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






37. What is cash flow used for?






38. In general EUR-USD is involved in roughly ___ of all FX volume






39. GBP-USD account for ____ of trading FX volume






40. ____________ - foreign currency/rate = USD






41. With direct quoting _______ of the first item is quoted for a specific price in terms of the second item.






42. If the Mexico rate is 5.25%/year and the US is 0.25%/year - What is the rate that would be used to calculate the forward rate?






43. Forward points is equal to...






44. What does it mean to hedge?






45. B/S rate is used for revaluation of foreign currency transaction to...






46. What is local currency?

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47. If you execute an FX trade to _______________ using the current market price - the trade will typically settle in two business days






48. The ticker symbol for the Chinese Yuan






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






50. What is the trading in volume for FX?