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






2. What is local currency?

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






4. How far in advance do we hedge?






5. What is the ticker symbol for Brazilian Real?






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






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






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






9. What are the four major FX accounting guidances?






10. Australian currency code is...






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






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






13. What is Fair Value hedge program used for?






14. A Spot happens in...






15. What are monetary accounts?






16. 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...






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






18. The ticker symbol for the Chinese Yuan






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






20. What is Functional Currency?






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






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






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. 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






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






26. Forward points is equal to...






27. 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






28. What is Revaluation?

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






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






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






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






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






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






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






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






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






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






39. 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?






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






41. What is the trading in volume for FX?






42. 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?






43. What rate is used on the balance sheet?






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






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






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






47. Direct quote- _____________=USD






48. Where are revaluations done?






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






50. What rate is used to book daily transactions?







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