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 are two methods of reducing translation and transaction exposure?






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






3. What are some characteristics of swaps?






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






5. Bailout Fund of EFSF - What is this shiz nitz?






6. What are some factors that influence exchange rates?






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






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






9. What is the first characteristic of transaction exposure ?






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






11. What is the fourth characteristic of transaction exposure?






12. What is the second characteristic of lag strategy?






13. Because many banks (2/3) are below the capital adequacy ratio of 9% many can not recapitalize on their own as a result






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






15. What are the types of Exchange Rate Fluctuations?






16. What causes big mac prices to vary?






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






18. What is the second issue with EFSF?






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






20. What is economic exposure?






21. What is hedging?


22. The euro faces risks fo recapitalization?






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


24. What is the characteristic of translation expose?






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






26. Most Transaction inovolve...






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






28. What are other strategies for managing forex risk?






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






30. What is the first characteristic of lag strategy?






31. What are the characteristics of economic exposure?






32. What is a currency swamp?






33. Marekts are open...






34. What is externally convertible currency






35. When do countries use foreign exchange market?






36. What is the nature of the forex market?






37. When do countries use the foreign exchange market?






38. What holds true to Purchase Power Parity Theory?






39. According to economic theories of exchage rate determination?






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






41. What is the second characteristic of transaction exposure?






42. What are the purposes of fiscal policies?






43. What are the important trading centers?






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






45. What are the two ways to quote currency?






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






47. What is non convertible currency?






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






49. What is arbitrage?






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