Test your basic knowledge |

Foreign Exchange Market

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 holds true to Purchase Power Parity Theory?






2. What is the third role of the U.S. dollar outside the U.S.?






3. What are three factors that impact a country's future exchange rate movements?






4. When do countries use the foreign exchange market?






5. What is the fourth characteristic of transaction exposure?






6. What is the second issue with EFSF?






7. What is a forward rate?






8. What implications does understanding foreign exchange rates have on managers?






9. It is important to stay __________ with your current events






10. What is the characteristic of translation expose?






11. What is the second thing that determines the Forex rates?






12. What are some characteristics of swaps?






13. What are the first two things that determine Forex rates?






14. What are the purposes of fiscal policies?






15. When do countries use foreign exchange market?






16. Currently margins require more cash reserves - What is the best method of doing this **** in the Euro Zone?






17. No single theory can explain explain the causes the value of currencies to change. True or False?






18. What are other strategies for managing forex risk?






19. What is the third thing that determines the forex rates?






20. Burger economics!!! Why do we use it?






21. What is the purpose of not concentrating assets in countries?






22. What is the second characteristic of lag strategy?






23. What is the fifth thing that determines the forex rates?






24. Defaulting on debt has a __________ that intertwines all countries in Europe.






25. How can translation exposure be described?






26. In the long run empirical testing has of the PPP Theory has proven to be accurate in the long run. True or False






27. Most Transaction inovolve...






28. Because of the recessionary environment euro banks have failed to do what?

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29. What are the important trading centers?






30. What are the two ways to quote currency?






31. What is capital fight when looking at it form investor psychology?






32. What is the fourth roles of the U.S. dollar outside the U.S.?






33. How do you establish central control?






34. What are the two ways to reduce economic exposure?






35. What is the nominal exchange rate?






36. What causes big mac prices to vary?






37. What is arbitrage?






38. What is the law of one price?






39. What is hedging?

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40. What is the bandwagon effect when looking at form investor psychology ?






41. What are some strategies for managing forex risk?






42. What is non convertible currency?






43. What are some factors that influence exchange rates?






44. What do monetary policies do?






45. What is the first characteristic of lead strategy?






46. What is the first roels of the U.S. dollar outside the U.S.?






47. Marekts are open...






48. What is the fourth thing that determines the forex rates?






49. What is a spot rate?






50. What is the real exchange rate?