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






2. 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






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






4. How is the hedge rate variance calculated?






5. 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?






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






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






8. Forward points is equal to...






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






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






11. Direct quote- _____________=USD






12. Treasury is responsible for banking requirements - funding for the business and managing...






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






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






15. How does treasury accomplish its purpose?






16. What are the four major FX accounting guidances?






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






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






19. How do you read EUR-USD = 1.40






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






21. What are monetary accounts?






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






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






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






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






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






27. How many currencies use Direct method of quoting?






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






29. What is Fair Value hedge program used for?






30. When is hedge rate published?






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






32. What is the trading in volume for FX?






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






34. The currency ticker for the Sweden Kroner is?






35. 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...






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






37. What is the purpose of hedging?






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






39. Where are revaluations done?






40. 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?






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






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






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






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






45. What is local currency?

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






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






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






49. 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






50. A forward happens in...