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. What rate is used on the P&L?






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






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






4. Forward points is equal to...






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






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






7. Australian currency code is...






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






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






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






11. What are the four major FX accounting guidances?






12. What is currency Translation?


13. One of the objectives of the hedge rate is to __________ that is used for pricing - planning - and accounting thus maximizing the efficiency of our hedge program






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






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






16. What rate is used to book daily transactions?






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






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






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






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






21. What does it mean to hedge?






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






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






24. How do you read EUR-USD = 1.40






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






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






27. What is reporting currency?






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






29. The currency ticker for the Sweden Kroner is?






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






31. What are non-monetary accounts?






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






33. What is the purpose of hedging?






34. A forward happens in...






35. What is Revaluation?


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






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






38. A Spot happens in...






39. What currencies use Direct method of quoting?






40. 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...






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






42. What are monetary accounts?






43. 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






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






45. What is Fair Value hedge program used for?






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






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






48. What rate is used on the balance sheet?






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






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