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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. USD-JPY account for ____ of trading FX volume






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






3. What is the purpose of hedging?






4. What instruments do we use to hedge?






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






6. A forward happens in...






7. What rate is used on the balance sheet?






8. The currency ticker for the Sweden Kroner is?






9. A Spot happens in...






10. Treasury's role is to identify risk - control to prevent erosion of...






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






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






13. 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?






14. What is local currency?

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15. 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...






16. How is the hedge rate variance calculated?






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






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






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






20. 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






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






22. What is currency Translation?

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23. How many currencies use Direct method of quoting?






24. Forward points is equal to...






25. If you are an European planning a trip to America - which rate do you want? 1.40 or 1.60?






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






27. How does treasury accomplish its purpose?






28. What is reporting currency?






29. What currencies use Direct method of quoting?






30. What are monetary accounts?






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






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






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






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






35. All other currency trading with USD accounts for ____ of FX volume






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






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






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






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






40. One of the objectives of the hedge rate is to __________ that is used for pricing - planning - and accounting thus maximizing the efficiency of our hedge program






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






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






43. What would happen if the US interest rate was bigger than Mexico?






44. Australian currency code is...






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






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






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






48. What are the four major FX accounting guidances?






49. The ticker symbol for the Chinese Yuan






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







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