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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 price of the forward contract determined?






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






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






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






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






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






7. What is Revaluation?

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8. 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






9. Australian currency code is...






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






11. What does it mean to hedge?






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






13. A forward happens in...






14. What is the ticker symbol for Brazilian Real?






15. What is the purpose of hedging?






16. How do you read EUR-USD = 1.40






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






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






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






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






21. The currency ticker for the Sweden Kroner is?






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






23. What currencies use Direct method of quoting?






24. What dictates minimum and maximum hedge percentages?






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






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






27. ____________ - foreign currency/rate = USD






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






29. What rate is used to book daily transactions?






30. Hedging instrument used in Fair Value Hedge program is...






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






32. How does treasury accomplish its purpose?






33. 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






34. 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






35. What is Fair Value hedge program used for?






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






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






38. How is the hedge rate variance calculated?






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






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






41. How many currencies use Direct method of quoting?






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






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






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






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






46. What is the trading in volume for FX?






47. Direct quote- _____________=USD






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






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






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