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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. Direct quote- _____________=USD






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






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






4. What currencies use Direct method of quoting?






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






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






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






8. 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?






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






10. When is hedge rate published?






11. What rate is used on the balance sheet?






12. How is the hedge rate variance calculated?






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






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






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






16. Forward points is equal to...






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






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






19. How does treasury accomplish its purpose?






20. What dictates minimum and maximum hedge percentages?






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






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






23. What is the trading in volume for FX?






24. Australian currency code is...






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






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






27. The ticker symbol for the Chinese Yuan






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






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






30. What are non-monetary accounts?






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






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






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






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






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






36. 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...






37. What instruments do we use to hedge?






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






39. A Spot happens in...






40. How do you read EUR-USD = 1.40






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






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






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






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






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






46. A forward happens in...






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






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






49. What is currency Translation?

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50. What is cash flow used for?