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 a forward rate?






2. What are the types of Exchange Rate Fluctuations?






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






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






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






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






7. What causes big mac prices to vary?






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






9. What is arbitrage?






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






11. Most Transaction inovolve...






12. How can transaction exposure be described?






13. What is the second issue with EFSF?






14. What is externally convertible currency






15. How can translation exposure be described?






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






17. What is free convertible currency?






18. What is a spot rate?






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






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






21. What are the important trading centers?






22. What is the first characteristic of lead strategy?






23. According to economic theories of exchage rate determination?






24. What is a currency swamp?






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






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






27. What are some factors that influence exchange rates?






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






29. What is economic exposure?






30. What is the second characteristic of lead strategy?






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






32. What are some strategies for managing forex risk?






33. When do countries use the foreign exchange market?






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






35. What is the law of one price?






36. What do monetary policies do?






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


38. When do countries use foreign exchange market?






39. What is the real exchange rate?






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






41. What is the first characteristic of transaction exposure ?






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






43. What are some characteristics of swaps?






44. What is the nature of the forex market?






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






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






47. What is non convertible currency?






48. How do you establish central control?






49. What is the characteristic of translation expose?






50. What is the nominal exchange rate?