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. A forward happens in...






2. What are non-monetary accounts?






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






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






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






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






7. What are the four major FX accounting guidances?






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






9. What rate is used on the balance sheet?






10. How do you read EUR-USD = 1.40






11. ____________ - foreign currency/rate = USD






12. What is Fair Value hedge program used for?






13. The currency ticker for the Sweden Kroner is?






14. 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






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






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






17. A Spot happens in...






18. The offset of revaluation is recorded to...






19. What is the ticker symbol for Brazilian Real?






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






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






22. What is Revaluation?

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






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






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






26. How far in advance do we hedge?






27. When is hedge rate published?






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






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






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






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






32. What is cash flow used for?






33. How many currencies use Direct method of quoting?






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






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






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






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






38. Direct quote- _____________=USD






39. What does it mean to hedge?






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






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






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






43. Where are revaluations done?






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






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






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






47. Forward points is equal to...






48. What is the trading in volume for FX?






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






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