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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. When is hedge rate published?






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






3. What is reporting currency?






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






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






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






7. What rate is used to book daily transactions?






8. Australian currency code is...






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






10. What is the purpose of hedging?






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






12. What are non-monetary accounts?






13. 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...






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






15. What are monetary accounts?






16. How do you read EUR-USD = 1.40






17. 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






18. Direct quote- _____________=USD






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






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






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






22. What does it mean to hedge?






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






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






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






26. How many currencies use Direct method of quoting?






27. What are the four major FX accounting guidances?






28. What is currency Translation?

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






30. What instruments do we use to hedge?






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






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






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






34. What is local currency?

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35. 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






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






37. How far in advance do we hedge?






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






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






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






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






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






43. A forward happens in...






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






45. What rate is used on the balance sheet?






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






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






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






49. ____________ - foreign currency/rate = USD






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