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. 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?






2. What is Fair Value hedge program used for?






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






4. What currencies use Direct method of quoting?






5. What is the ticker symbol for Brazilian Real?






6. Direct quote- _____________=USD






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






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






9. 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






10. Where are revaluations done?






11. How many currencies use Direct method of quoting?






12. What are the four major FX accounting guidances?






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






14. How does treasury accomplish its purpose?






15. 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






16. What rate is used to book daily transactions?






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






18. What does it mean to hedge?






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






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






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






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






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






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






25. When is hedge rate published?






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






27. What is the trading in volume for FX?






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






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






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






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






32. What is cash flow used for?






33. 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?






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






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






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






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






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






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






40. What is the purpose of hedging?






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






43. What instruments do we use to hedge?






44. What rate is used on the balance sheet?






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






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






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






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






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






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