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 is arbitrage?






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






3. Most Transaction inovolve...






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


5. What is the real exchange rate?






6. According to economic theories of exchage rate determination?






7. What is the third characteristic of transaction exposure?






8. What is the law of one price?






9. How and What is the purpose of distributing assets?






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






11. What are some strategies for managing forex risk?






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






13. What is the second characteristic of lead strategy?






14. What is the fourth characteristic of transaction exposure?






15. Marekts are open...






16. What is the nominal exchange rate?






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






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






19. What is the first characteristic of lead strategy?






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






21. What causes big mac prices to vary?






22. When do countries use foreign exchange market?






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






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






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






26. What is economic exposure?






27. How do you insure or hedge against a Forex risk?






28. What is the second characteristic of transaction exposure?






29. What are two methods of reducing translation and transaction exposure?






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






31. What are other strategies for managing forex risk?






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






33. What do monetary policies do?






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






35. What are some factors that influence exchange rates?






36. What is the second role of the U.S. dollar outside the U.S. ?






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






38. What are the purposes of fiscal policies?






39. What is externally convertible currency






40. What holds true to Purchase Power Parity Theory?






41. What is a currency swamp?






42. What is the second characteristic of lag strategy?






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






44. What are the types of Exchange Rate Fluctuations?






45. How do you establish central control?






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






47. How can translation exposure be described?






48. When do countries use the foreign exchange market?






49. What are the three ways of insuring against a Forex risk?






50. What are the important trading centers?