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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. What is currency Translation?

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2. The ticker symbol for the Chinese Yuan






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






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






5. How do you read EUR-USD = 1.40






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






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






8. What is Functional Currency?






9. What are non-monetary accounts?






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






11. ____________ - foreign currency/rate = USD






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






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






14. What is cash flow used for?






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






16. What rate is used on the balance sheet?






17. How many currencies use Direct method of quoting?






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






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






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






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






22. Forward points is equal to...






23. How far in advance do we hedge?






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






25. What instruments do we use to hedge?






26. What are the four major FX accounting guidances?






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






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






29. What rate is used to book daily transactions?






30. How is the hedge rate variance calculated?






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






32. 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






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






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






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






36. Australian currency code is...






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






38. What is the ticker symbol for Brazilian Real?






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






40. What is local currency?

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41. 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...






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






43. What is reporting currency?






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






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






46. 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






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






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






49. What is Revaluation?

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50. 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







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