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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. How is the price of the forward contract determined?






2. The ticker symbol for the Chinese Yuan






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






4. ____________ - foreign currency/rate = USD






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






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






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






8. What is local currency?

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






10. What instruments do we use to hedge?






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






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






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






14. All other currency trading with USD accounts for ____ of FX volume






15. When is hedge rate published?






16. How far in advance do we hedge?






17. 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?






18. 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






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






20. How does treasury accomplish its purpose?






21. Where are revaluations done?






22. What is reporting currency?






23. What is the purpose of hedging?






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






25. What are monetary accounts?






26. A ____________________ is an exchange of two currencies at a fixed rate for any date other than spot delivery






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






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






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






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






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






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






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






34. What is cash flow used for?






35. What does it mean to hedge?






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






37. What rate is used on the balance sheet?






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






39. What are the four major FX accounting guidances?






40. A forward happens in...






41. An ___________ expresses the value of one currency relative to another






42. The currency ticker for the Sweden Kroner is?






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






44. What is Fair Value hedge program used for?






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






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






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






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






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






50. What currencies use Direct method of quoting?







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