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






2. What currencies use Direct method of quoting?






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






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






5. The currency ticker for the Sweden Kroner is?






6. How is the hedge rate variance calculated?






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






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






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






10. What are monetary accounts?






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






12. ____________ should be denominated in the currency they will either be paid or received in...






13. 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






14. What is Fair Value hedge program used for?






15. How many currencies use Direct method of quoting?






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






17. The difference in interest rate is referred to as...






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






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






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






21. What is the purpose of hedging?






22. What is cash flow used for?






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






24. In a GBP-USD relationship - if pound is strengthening it means that you can get _____ US Dollars for one pound






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






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






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






28. How does treasury accomplish its purpose?






29. If 1 Share = 10 USD and 1 CASE = 30 USD - then 1 share =?






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






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






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






33. When is hedge rate published?






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






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






36. 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






37. ____________ - foreign currency/rate = USD






38. The ticker symbol for the Chinese Yuan






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






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






41. What dictates minimum and maximum hedge percentages?






42. What are non-monetary accounts?






43. What instruments do we use to hedge?






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






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






46. What is local currency?

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47. What is Functional Currency?






48. What rate is used on the P&L?






49. ____________ booked a hedge rate is trued up to the EHR each month during the quarter






50. 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?