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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 difference in interest rate is referred to as...






2. 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?






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






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






5. What is the trading in volume for FX?






6. What dictates minimum and maximum hedge percentages?






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






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






9. The currency ticker for the Sweden Kroner is?






10. Australian currency code is...






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






12. What is Fair Value hedge program used for?






13. What are the four major FX accounting guidances?






14. A Spot happens in...






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






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






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






18. What is reporting currency?






19. What is the ticker symbol for Brazilian Real?






20. What is currency Translation?

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21. What are non-monetary accounts?






22. What are monetary accounts?






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






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






25. 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?






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






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






28. How many currencies use Direct method of quoting?






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






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






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






32. Where are revaluations done?






33. How is the hedge rate variance calculated?






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






35. What instruments do we use to hedge?






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






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






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






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






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






41. Direct quote- _____________=USD






42. What rate is used to book daily transactions?






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






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






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






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






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






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






49. ____________ - foreign currency/rate = USD






50. The ticker symbol for the Chinese Yuan







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