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. When do countries use the foreign exchange market?






2. What are some factors that influence exchange rates?






3. What is the second characteristic of lag strategy?






4. What is the first characteristic of transaction exposure ?






5. What is the law of one price?






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






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






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






9. What is free convertible currency?






10. What are the two ways to quote currency?






11. What is externally convertible currency






12. What is the second characteristic of lead strategy?






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






14. What are some characteristics of swaps?






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






16. What is a currency swamp?






17. What are some strategies for managing forex risk?






18. What are the three different types of foreign exchange rate risks?






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






20. What is the first issue with EFSF?






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






22. The euro faces risks fo recapitalization?






23. According to economic theories of exchage rate determination?






24. Greece has not defaulted because it has not been able to fully implement its...






25. What is non convertible currency?






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






27. What are the types of Exchange Rate Fluctuations?






28. Most Transaction inovolve...






29. What is the first characteristic of lead strategy?






30. What is the nature of the forex market?






31. What is the real exchange rate?






32. What is the characteristic of translation expose?






33. When do countries use foreign exchange market?






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






35. Marekts are open...






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






37. How do you establish central control?






38. How can transaction exposure be described?






39. What is arbitrage?






40. What holds true to Purchase Power Parity Theory?






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


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






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






44. What do monetary policies do?






45. What is economic exposure?






46. What is a spot rate?






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






48. What is the third characteristic of transaction exposure?






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






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