Test your basic knowledge |

Foreign Exchange Essentials

Subjects : business-skills, industries

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. 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?
1.40 - Because I would be able to buy more euros
5%
directly or indirectly
Buy a stock in an Oil Company. Stock price increases when oil goes up and offset for your expenses in filling up tank

2. In a EUR-USD relationship - when arrow is going up means Euro is strengthening and Dollar...
Government regulation and cost of hedging
6 weeks prior to Q/E
3 business days and beyond
weakens

3. What is the trading in volume for FX?
3 -210 billion (3 trillion)
5%
300 billion
largest - It is open 24 hours a day - except weekends

4. Revaluation can be hedged - while ___________ cannot be hedged
less
translation
weakens
F&O account 87503

5. When looking at a currency chart - you need to know if the currency is quoted Directly or Indirectly to be able to describe...
China - Malaysia - Colombia - Chile - Argentina
What is happening
direct
1.40 - Because I would be able to buy more euros

6. Treasury is responsible for managing companies funds and determining the firms'...
3 -210 billion (3 trillion)
SEK
financial strategy and financial policy
downward slope

7. What is Fair Value hedge program used for?
China - Malaysia - Colombia - Chile - Argentina
directly or indirectly
financial strategy and financial policy
Used to hedge against the change in fair value (revaluation) of monetary assets & liabilities

8. What is reporting currency?
valuable
average rate
Currency in which the entity reports results externally
Process to convert an entity's BS & P&L from the functional currency to the reporting currency - BS is translated at BS rate - P&L is translated at APL rate

9. How is the price of the forward contract determined?
an estimate of aggregate rate
Treasury Daily Spot Rate
Current market price - spot - plus or minus the difference between the interest rates of the two countries
SEK

10. What are monetary accounts?
Effective Hedge rate
translation
Accounts that revalue every month to the balance sheet rate. (cash - A/are)
British Pound - Australian Dollar - New Zealand Dollar - Euro

11. We do not speculate on Foreign Exchange - 10-K says it is to reduce the impact of...
financial risk
adverse fluctuations
an estimate of aggregate rate
3 -210 billion (3 trillion)

12. 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...
Hedging protects the value of a future event by executing a trade that changes value in the opposite direction as the future event.
Oracle
is getting bigger
Mitigates risks by using hedging techniques

13. How far in advance do we hedge?
financial risk
15 months in advance - layering on hedges through time
Oracle
21%

14. Treasury ensures that companies have ____________ to meet its obligations
liquidity and cash
weakens
Forward Points
exchange one currency for another

15. If 1 pizza = 15 USD then ____ = 1/15 pizza
Process to revalue the monetary BS accounts from: entered rate to B/S rate - prior month's B/S rate to current month's BS rates
1USD
1 unit
Pound strengthens

16. In a stock-USD relationship - when arrow is going up means that stock is becoming more ______ against dollar
adverse fluctuations
valuable
British Pound - Australian Dollar - New Zealand Dollar - Euro
foreign exchange forward contract

17. Whether the quote was indirect or direct - they are all stored as ______ in Oracle
direct
financial strategy and financial policy
allow FX rate
functional currency

18. What is cash flow used for?
allow FX rate
Forward contracts and Options
Mitigates risks by using hedging techniques
Used to hedge against variability in expected future cash flows

19. What is local currency?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

20. How is the hedge rate variance calculated?
The difference between hedge rate and final effective hedge rate
exchange rate
Process to revalue the monetary BS accounts from: entered rate to B/S rate - prior month's B/S rate to current month's BS rates
Forward Points

21. What rate is used on the P&L?
three digit ticker symbol ex: USD - United States Dollar
The average P&L rate (APL) which is the weighted average of Treasury Daily Spot rates for the month
Process to revalue the monetary BS accounts from: entered rate to B/S rate - prior month's B/S rate to current month's BS rates
Currency of the respective operating unit's country

22. What instruments do we use to hedge?
allow FX rate
Forward contracts and Options
1 share = 1/3 case
direct

23. The current market price for any currency pair is referred to as ?
Spot price
P&L activity
allow FX rate
Effective Hedge rate

24. How does treasury accomplish its purpose?
AUD
is getting bigger
Mitigates risks by using hedging techniques
SEK

25. If 1 case = 30 USD and 1 pizza = 15 USD - then What is 1 case = ?
90%
1 Case = 2 pizzas
1.60 - Because you can buy more dollars
two business days

26. The ______________ for a currency normally uses the first two digits to identify the country - and the last digit to identify the currency
China - Malaysia - Colombia - Chile - Argentina
Process to revalue the monetary BS accounts from: entered rate to B/S rate - prior month's B/S rate to current month's BS rates
1 Case = 2 pizzas
three digit ticker symbol ex: USD - United States Dollar

27. What currencies use Direct method of quoting?
Process to convert an entity's BS & P&L from the functional currency to the reporting currency - BS is translated at BS rate - P&L is translated at APL rate
90%
21%
British Pound - Australian Dollar - New Zealand Dollar - Euro

28. What rate is used to book daily transactions?
Treasury Daily Spot Rate
foreign exchange forward contract
Currency in which the entity reports results externally
End of Period Rate (SCO-4 rate)

29. What are non-monetary accounts?
What is happening
exchange rate
There are FOUR
Accounts that are carried at historical rates at which they were booked (fixed assets - inventory)

30. Give an example of one way to hedge a price increase in gas prices...
The calculation is the same - but instead of adding forward points you subtract
functional currency
F&O account 87503
Buy a stock in an Oil Company. Stock price increases when oil goes up and offset for your expenses in filling up tank

31. The currency ticker for the Sweden Kroner is?
SEK
adverse fluctuations
interest rate differential
BS account balances

32. Treasury's role is to identify risk - control to prevent erosion of...
actual weighted average contract rate
value
financial strength
an estimate of aggregate rate

33. What is the ticker symbol for Brazilian Real?
Used to hedge against the change in fair value (revaluation) of monetary assets & liabilities
China - Malaysia - Colombia - Chile - Argentina
13%
BRL

34. Australian currency code is...
AUD
currency options and forward
The difference between hedge rate and final effective hedge rate
CNY

35. What is currency Translation?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

36. Hedge Rate is _______________ that will be achieved on a specific quarter's cash flow
3 -210 billion (3 trillion)
an estimate of aggregate rate
Indirect quote
13%

37. B/S rate is used for revaluation of foreign currency transaction to...
financial strength
BRL
Hedging allows us to provide stable earnings - makes planning simpler - and allows for longer lead time for marketing
functional currency

38. Hedging instrument used in Fair Value Hedge program is...
direct
BRL
fx forward
downward slope

39. What is Revaluation?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

40. An ___________ expresses the value of one currency relative to another
1.40 - Because I would be able to buy more euros
Hedging protects the value of a future event by executing a trade that changes value in the opposite direction as the future event.
F&O account 87503
exchange rate

41. The offset of revaluation is recorded to...
an estimate of aggregate rate
British Pound - Australian Dollar - New Zealand Dollar - Euro
F&O account 87503
strengthens

42. What would happen if the US interest rate was bigger than Mexico?
The calculation is the same - but instead of adding forward points you subtract
interest rate differential
average rate
direct

43. The rules for adding or subtracting forward points depend on whether it is quoted...
Process to convert an entity's BS & P&L from the functional currency to the reporting currency - BS is translated at BS rate - P&L is translated at APL rate
90%
directly or indirectly
average rate

44. In a GBP-USD relationship - if pound is strengthening it means that you can get _____ US Dollars for one pound
translation
adverse fluctuations
more
Hedging allows us to provide stable earnings - makes planning simpler - and allows for longer lead time for marketing

45. What rate is used on the balance sheet?
Process to convert an entity's BS & P&L from the functional currency to the reporting currency - BS is translated at BS rate - P&L is translated at APL rate
End of Period Rate (SCO-4 rate)
SEK
Accounts that are carried at historical rates at which they were booked (fixed assets - inventory)

46. US Treasuries is the second highest trading volume accounting for...
The average P&L rate (APL) which is the weighted average of Treasury Daily Spot rates for the month
300 billion
China - Malaysia - Colombia - Chile - Argentina
foreign currency* rate

47. All other currency trading with USD accounts for ____ of FX volume
1.60 - Because you can buy more dollars
functional currency
3 business days and beyond
21%

48. GBP-USD account for ____ of trading FX volume
The calculation is the same - but instead of adding forward points you subtract
Currency in which the entity reports results externally
12%
13%

49. 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?
5%
The currency of the primary economic environment in which the legal entity operates
fx forward
Treasury Daily Spot Rate

50. What are some of the reason not hedge at all or partially hedge in a few countries?
30%
Government regulation and cost of hedging
MXN - EUR - CHF
15 months in advance - layering on hedges through time

Sorry!:) No result found.

Can you answer 50 questions in 15 minutes?

Major Subjects
Tests & Exams AP CLEP DSST GRE SAT GMAT	Certifications CISSP go to https://www.isc2.org/ PMP ITIL RHCE MCTS More...	IT Skills Android Programming Data Modeling Objective C Programming Basic Python Programming Adobe Illustrator More...	Business Skills Advertising Techniques Business Accounting Basics Business Strategy Human Resource Management Marketing Basics More...
Soft Skills Body Language People Skills Public Speaking Persuasion Job Hunting And Resumes More...	Vocabulary GRE Vocab SAT Vocab TOEFL Essential Vocab Basic English Words For All Global Words You Should Know Business English More...	Languages AP German Vocab AP Latin Vocab SAT Subject Test: French Italian Survival Norwegian Survival More...	Engineering Audio Engineering Computer Science Engineering Aerospace Engineering Chemical Engineering Structural Engineering More...
Health Sciences Basic Nursing Skills Health Science Language Fundamentals Veterinary Technology Medical Language Cardiology Clinical Surgery More...	English Grammar Fundamentals Literary And Rhetorical Vocab Elements Of Style Vocab Introduction To English Major Complete Advanced Sentences Literature Homonyms More...	Math Algebra Formulas Basic Arithmetic: Measurements Metric Conversions Geometric Properties Important Math Facts Number Sense Vocab Business Math More...	Other Major Subjects Science Economics History Law Performing-arts Cooking Logic & Reasoning Trivia

Test your basic knowledge |

Foreign Exchange Essentials

Sorry!:) No result found.

Can you answer 50 questions in 15 minutes?

Let me suggest you:

Browse all subjects

Browse all tests

Most popular tests

Major Subjects

Tests & Exams

Certifications

IT Skills

Business Skills

Soft Skills

Vocabulary

Languages

Engineering

Health Sciences

English

Math

Other Major Subjects

Browse all subjects

Browse all tests

Most popular tests