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. The offset of revaluation is recorded to...






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






3. What is Functional Currency?






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






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






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






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






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






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






10. How does treasury accomplish its purpose?






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






12. What currencies use Direct method of quoting?






13. What are monetary accounts?






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






15. 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...






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






17. What are non-monetary accounts?






18. What rate is used on the balance sheet?






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






20. A Spot happens in...






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






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






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






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






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






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






27. When is hedge rate published?






28. ____________ should be denominated in the currency they will either be paid or received in...






29. What is Fair Value hedge program used for?






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






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






32. What are the four major FX accounting guidances?






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






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






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






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






37. Where are revaluations done?






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






39. 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






40. Direct quote- _____________=USD






41. What rate is used to book daily transactions?






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






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






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






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






46. What is the ticker symbol for Brazilian Real?






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






48. 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?






49. 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?






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