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 the third role of the U.S. dollar outside the U.S.?






2. What are the purposes of fiscal policies?






3. The euro faces risks fo recapitalization?






4. What holds true to Purchase Power Parity Theory?






5. What is a spot rate?






6. What is the second characteristic of lag strategy?






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






8. How can transaction exposure be described?






9. What are some strategies for managing forex risk?






10. What is hedging?


11. What is a currency swamp?






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






13. What are the two ways to quote currency?






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






15. What causes big mac prices to vary?






16. How can translation exposure be described?






17. What is economic exposure?






18. What are some characteristics of swaps?






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






20. According to economic theories of exchage rate determination?






21. Most Transaction inovolve...






22. What are the characteristics of economic exposure?






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






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






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






26. What is the real exchange rate?






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






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






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






30. What is free convertible currency?






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






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






33. What is the first characteristic of lag strategy?






34. What are the important trading centers?






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






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






37. What is the characteristic of translation expose?






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






39. What is the third characteristic of transaction exposure?






40. What is the second issue with EFSF?






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






42. What is the law of one price?






43. What is the first characteristic of transaction exposure ?






44. How do you establish central control?






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






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






47. What is the second characteristic of transaction exposure?






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


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






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