Test your basic knowledge |

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. What is the trading in volume for FX?






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






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






4. What is local currency?

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5. When is hedge rate published?






6. How is the hedge rate variance calculated?






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






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






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






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






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






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






13. What is currency Translation?

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14. How do you read EUR-USD = 1.40






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






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






17. 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?






18. What dictates minimum and maximum hedge percentages?






19. ____________ - foreign currency/rate = USD






20. What instruments do we use to hedge?






21. What are monetary accounts?






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






23. 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...






24. How does treasury accomplish its purpose?






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






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






27. In a EUR-USD relationship - when arrow is going down - means Euro weakens and US Dollar...






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






29. What currencies use Direct method of quoting?






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






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






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






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






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






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






36. What does it mean to hedge?






37. 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






38. What rate is used to book daily transactions?






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






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






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






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






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






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






45. What is cash flow used for?






46. How many currencies use Direct method of quoting?






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






48. What is the ticker symbol for Brazilian Real?






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






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