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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. The ticker symbol for the Chinese Yuan






2. B/S rate is used for revaluation of foreign currency transaction to...






3. What is currency Translation?

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






5. In general EUR-USD is involved in roughly ___ of all FX volume






6. 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






7. 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...






8. What is cash flow used for?






9. How is the hedge rate variance calculated?






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






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






12. What is the purpose of hedging?






13. What is reporting currency?






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






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






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






17. 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






18. How do you read EUR-USD = 1.40






19. What rate is used on the balance sheet?






20. What instruments do we use to hedge?






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






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






23. Hedging instrument used in cash flow program is...






24. 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






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






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






27. What is Fair Value hedge program used for?






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






29. How far in advance do we hedge?






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






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






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






33. What rate is used to book daily transactions?






34. Australian currency code is...






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






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






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






38. What are monetary accounts?






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






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






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






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






44. What is Functional Currency?






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






46. What currencies use Direct method of quoting?






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






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






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






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







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