Test your basic knowledge |

Foreign Exchange Market

Subjects : business-skills, industries

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 fourth thing that determines the forex rates?
Relative price differences and ppp
Banks stability was measure at a 5% capital adequacy ratio
1. non residents can convert their holdings of domestic currency 2. residents are limited in some way to convert currency
Exchange rate policies

2. What are the three ways of insuring against a Forex risk?
Productivity and balance payments
Issue mo good loans so that profits from new business can eat away the losses form the bad
Spot rates - forward rates - and swaps
1. no process 2. no agreement as to who should hold the process 3. Germans want eco reforms following bailout 4. remediation and supervisory structures must be built

3. How do you insure or hedge against a Forex risk?
Group of investors movement in the same direction and same time or government intervention
Distribute to various locatoij so firms long term financial well being is not severly affected by changes in exchange rates
An attempt to collect currency receivables early as result of expected depreciation
Forward exchange or spot exchange

4. What is the first characteristic of lag strategy?
Group of investors movement in the same direction and same time or government intervention
Delay collection of foreign currency receivables if currency is exception to appreciate
Spot rates - forward rates - and swaps
High-speed computer linkages between trading centers around the globe - have created 1 market - resulted in no significant difference between exchange rate quotes - different exchange quoted result in arbitrage opportunities

5. What is externally convertible currency
Investor psychology
u.s. dollar
There is absence of trade barriers - each country price in commodity basket are at an equal ration - not accurate in predicting exchange rates in the short run
1. non residents can convert their holdings of domestic currency 2. residents are limited in some way to convert currency

6. What do monetary policies do?
Group of investors movement in the same direction and same time or government intervention
Control the amount of money in circulation - enforced by government policies - focus on growth rate
Measurement of past events
Government allows both residents and non residents to purchase unlimited amounts of foreign currency with domestic currency

7. When do countries use foreign exchange market?
Transportation costs - trade barriers - and not trade inputs such as rents or wages
Firms future international earning power
The exchange rate between 2 currencies; delivery within two days (conversion on a particular day)
1. pay a foreign co for its products or services in a countries currency 2. spare cash for short term money market investments 3. involved in currency speculation

8. What are some factors that influence exchange rates?
Supply & demand of the currency -Interest rates -Inflation -Investor expectations
The exchange rate between 2 currencies; delivery within two days (conversion on a particular day)
domino effect
State driven recapitalization are now needed

9. What is the third characteristic of transaction exposure?
Borrowing of funds in foreign currency
Collecting & spending of money by the government
Both residents and on residents are prohibited from converting their holdings of domestic currency into a foreign currency
1. no process 2. no agreement as to who should hold the process 3. Germans want eco reforms following bailout 4. remediation and supervisory structures must be built

10. What is the third role of the U.S. dollar outside the U.S.?
Exchange rates are determined by the demand and supply for different currencies
Reserve currency
Paying foreign currency payable before dues as a result expected currency appreciation
Goods and services of one country can be exchanged for the goods and services of another country

11. What is the fourth roles of the U.S. dollar outside the U.S.?
Productivity and balance payments
Vehicle currency(transaction between 2 less commonly used currencies)
Supply & demand of the currency -Interest rates -Inflation -Investor expectations
True

12. How can translation exposure be described?
Impact of currency exchange rate changes on reported financial statements
Vehicle currency(transaction between 2 less commonly used currencies)
1. receive payments for exports 2. receive income from FDI 3. Receive income from licensing agreements with foreign firms are in foreign currencies.
1. no process 2. no agreement as to who should hold the process 3. Germans want eco reforms following bailout 4. remediation and supervisory structures must be built

13. What is the second role of the U.S. dollar outside the U.S. ?
True
Intervention currency (peg country currency)
domino effect
Firms future international earning power

14. How do you establish central control?
1. protect resources efficiently 2. ensure correct mix of tactics and strategies
In competitive markets free of transportation costs and barriers to trade identical products sold in different countries must sell for the same price is expressed in terms of the same currency
Affected by fluctuation in foreign exchange values
Increase currency values and protect against increases in foreign prices of goods and services

15. What are the important trading centers?
Estb. good reporting systems - check monthly foreign exchange reports and distinguish between transaction - economic and translation exposure
London - New York - Tokyo - and Singapore
Paying foreign currency payable before dues as a result expected currency appreciation
Exchange rate policies

16. It is important to stay __________ with your current events
Group of investors movement in the same direction and same time or government intervention
1. no process 2. no agreement as to who should hold the process 3. Germans want eco reforms following bailout 4. remediation and supervisory structures must be built
up to date
Affected by fluctuation in foreign exchange values

17. When do countries use the foreign exchange market?
Large number of individuals and cos exchange of domestic currencies for a foreign currency
Issue mo good loans so that profits from new business can eat away the losses form the bad
Group of investors movement in the same direction and same time or government intervention
1. receive payments for exports 2. receive income from FDI 3. Receive income from licensing agreements with foreign firms are in foreign currencies.

18. What is non convertible currency?
Delay payables if currency is expected to depreciate
Both residents and on residents are prohibited from converting their holdings of domestic currency into a foreign currency
Interest rates and money supply
State driven recapitalization are now needed

19. The euro faces risks fo recapitalization?
Relative price differences and ppp
Banks stability was measure at a 5% capital adequacy ratio
Inflation - interest rate - and market psychology
Intervention currency (peg country currency)

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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

21. What is a spot rate?
The exchange rate between 2 currencies; delivery within two days (conversion on a particular day)
Measurement of past events
A common reference
The process of insuring one's business against foreign exchange risk by using forward exchanges or currency swaps

22. What is the characteristic of translation expose?
Measurement of past events
1. no process 2. no agreement as to who should hold the process 3. Germans want eco reforms following bailout 4. remediation and supervisory structures must be built
Spot rates and forward rates
Monetary and fiscal policies

23. What is capital fight when looking at it form investor psychology?
Large number of individuals and cos exchange of domestic currencies for a foreign currency
True
Control the amount of money in circulation - enforced by government policies - focus on growth rate
True

24. What are the purposes of fiscal policies?
Large number of individuals and cos exchange of domestic currencies for a foreign currency
Collecting & spending of money by the government
Goods and services of one country can be exchanged for the goods and services of another country
Both residents and on residents are prohibited from converting their holdings of domestic currency into a foreign currency

25. What are the two ways to quote currency?
Control the amount of money in circulation - enforced by government policies - focus on growth rate
Spot rates and forward rates
1. not that many staffing 2. months away form being implemented 3. esfs new power to restructured banks goes against EU treaties that guarantee all banking authority to the member state level
Distribute to various locatoij so firms long term financial well being is not severly affected by changes in exchange rates

26. What are the three different types of foreign exchange rate risks?
London - New York - Tokyo - and Singapore
Large number of individuals and cos exchange of domestic currencies for a foreign currency
Transaction - translation and economic exposure
True

27. What is the bandwagon effect when looking at form investor psychology ?
True
Affected by changes in exchange rates aslo long term effect of changes in exchange rates on future prices - sales - and costs
Group of investors movement in the same direction and same time or government intervention
Affected by fluctuation in foreign exchange values

28. What is a forward rate?
Both residents and on residents are prohibited from converting their holdings of domestic currency into a foreign currency
The exchange rate between 2 currencies;future delievery in 30/60/90/180 days
Impact of currency exchange rate changes on reported financial statements
Lead and lag strategies

29. What is the second characteristic of transaction exposure?
True
Obligations for the purchase or sale of goods and services at previously agreed prices
Large number of individuals and cos exchange of domestic currencies for a foreign currency
Measurement of past events

30. What is the law of one price?
An attempt to collect currency receivables early as result of expected depreciation
In competitive markets free of transportation costs and barriers to trade identical products sold in different countries must sell for the same price is expressed in terms of the same currency
24/7
Currency of one country can be exchanged for the currency of another country

31. According to economic theories of exchage rate determination?
Exchange rates are determined by the demand and supply for different currencies
domino effect
The exchange rate between 2 currencies; delivery within two days (conversion on a particular day)
Obligations for the purchase or sale of goods and services at previously agreed prices

32. How can transaction exposure be described?
Affected by fluctuation in foreign exchange values
These transactions are used when need to move out of one currency into another - they are for a limited period - there is no foreign exchange rate risk
The income form individual transacations
Increase currency values and protect against increases in foreign prices of goods and services

33. What is the second characteristic of lag strategy?
Delay payables if currency is expected to depreciate
up to date
Simultaneous purchase and sale of a given amount of foreign exchange for two different value dates
Manages the Greeks - the Irish - and Portuguese bailouts and has passed recent amendments to legally assit euro banks and govs

34. What implications does understanding foreign exchange rates have on managers?
up to date
It helps them understand the influence of exchange rates on profitability of trade investment deals
Increase their exposure to banking -'s banking center
Currency of one country can be exchanged for the currency of another country

35. How and What is the purpose of distributing assets?
Distribute to various locatoij so firms long term financial well being is not severly affected by changes in exchange rates
An attempt to collect currency receivables early as result of expected depreciation
The income form individual transacations
Issue mo good loans so that profits from new business can eat away the losses form the bad

36. What is the purpose of not concentrating assets in countries?
Obligations for the purchase or sale of goods and services at previously agreed prices
Measurement of past events
Increase currency values and protect against increases in foreign prices of goods and services
The process of insuring one's business against foreign exchange risk by using forward exchanges or currency swaps

37. Greece has not defaulted because it has not been able to fully implement its...
Simultaneous purchase and sale of a given amount of foreign exchange for two different value dates
Exchange rates are determined by the demand and supply for different currencies
In competitive markets free of transportation costs and barriers to trade identical products sold in different countries must sell for the same price is expressed in terms of the same currency
agreed upon austerity

38. Because many banks (2/3) are below the capital adequacy ratio of 9% many can not recapitalize on their own as a result
State driven recapitalization are now needed
Lending of funds in foreign currencies
Collecting & spending of money by the government
Banks stability was measure at a 5% capital adequacy ratio

39. What is the first characteristic of lead strategy?
An attempt to collect currency receivables early as result of expected depreciation
Reserve currency
Spot rates and forward rates
1. protect resources efficiently 2. ensure correct mix of tactics and strategies

40. What is the fourth characteristic of transaction exposure?
The process of insuring one's business against foreign exchange risk by using forward exchanges or currency swaps
Lending of funds in foreign currencies
u.s. dollar
It is used to measure how far the nominal exchange rate deviate from the one that would create PPP

41. What is the nature of the forex market?
High-speed computer linkages between trading centers around the globe - have created 1 market - resulted in no significant difference between exchange rate quotes - different exchange quoted result in arbitrage opportunities
Monetary and fiscal policies
Collecting & spending of money by the government
True

42. What is the real exchange rate?
It helps them understand the influence of exchange rates on profitability of trade investment deals
Obligations for the purchase or sale of goods and services at previously agreed prices
Impact of currency exchange rate changes on reported financial statements
Goods and services of one country can be exchanged for the goods and services of another country

43. Currently margins require more cash reserves - What is the best method of doing this **** in the Euro Zone?
Lending of funds in foreign currencies
Intervention currency (peg country currency)
Issue mo good loans so that profits from new business can eat away the losses form the bad
Group of investors movement in the same direction and same time or government intervention

44. No single theory can explain explain the causes the value of currencies to change. True or False?
It is used to measure how far the nominal exchange rate deviate from the one that would create PPP
Impact of currency exchange rate changes on reported financial statements
True
up to date

45. What are the first two things that determine Forex rates?
In competitive markets free of transportation costs and barriers to trade identical products sold in different countries must sell for the same price is expressed in terms of the same currency
London - New York - Tokyo - and Singapore
Relative price differences and ppp
Measurement of past events

46. What are some strategies for managing forex risk?
Estb. good reporting systems - check monthly foreign exchange reports and distinguish between transaction - economic and translation exposure
Establish central control and attempts to forecast future exchange rates
Investor psychology
High-speed computer linkages between trading centers around the globe - have created 1 market - resulted in no significant difference between exchange rate quotes - different exchange quoted result in arbitrage opportunities

47. What are the types of Exchange Rate Fluctuations?
Group of investors movement in the same direction and same time or government intervention
Monetary and fiscal policies
up to date
Control the amount of money in circulation - enforced by government policies - focus on growth rate

48. What causes big mac prices to vary?
Transportation costs - trade barriers - and not trade inputs such as rents or wages
Lead and lag strategies
The exchange rate between 2 currencies;future delievery in 30/60/90/180 days
Forward exchange or spot exchange

49. What is free convertible currency?
Interest rates and money supply
Government allows both residents and non residents to purchase unlimited amounts of foreign currency with domestic currency
Reserve currency
Relative price differences and ppp

50. What is the nominal exchange rate?
Inflation - interest rate - and market psychology
Paying foreign currency payable before dues as a result expected currency appreciation
Currency of one country can be exchanged for the currency of another country
Government allows both residents and non residents to purchase unlimited amounts of foreign currency with domestic currency

Sorry!:) No result found.

Can you answer 50 questions in 15 minutes?

Major Subjects
Tests & Exams AP CLEP DSST GRE SAT GMAT	Certifications CISSP go to https://www.isc2.org/ PMP ITIL RHCE MCTS More...	IT Skills Android Programming Data Modeling Objective C Programming Basic Python Programming Adobe Illustrator More...	Business Skills Advertising Techniques Business Accounting Basics Business Strategy Human Resource Management Marketing Basics More...
Soft Skills Body Language People Skills Public Speaking Persuasion Job Hunting And Resumes More...	Vocabulary GRE Vocab SAT Vocab TOEFL Essential Vocab Basic English Words For All Global Words You Should Know Business English More...	Languages AP German Vocab AP Latin Vocab SAT Subject Test: French Italian Survival Norwegian Survival More...	Engineering Audio Engineering Computer Science Engineering Aerospace Engineering Chemical Engineering Structural Engineering More...
Health Sciences Basic Nursing Skills Health Science Language Fundamentals Veterinary Technology Medical Language Cardiology Clinical Surgery More...	English Grammar Fundamentals Literary And Rhetorical Vocab Elements Of Style Vocab Introduction To English Major Complete Advanced Sentences Literature Homonyms More...	Math Algebra Formulas Basic Arithmetic: Measurements Metric Conversions Geometric Properties Important Math Facts Number Sense Vocab Business Math More...	Other Major Subjects Science Economics History Law Performing-arts Cooking Logic & Reasoning Trivia

Test your basic knowledge |

Foreign Exchange Market

Sorry!:) No result found.

Can you answer 50 questions in 15 minutes?

Let me suggest you:

Browse all subjects

Browse all tests

Most popular tests

Major Subjects

Tests & Exams

Certifications

IT Skills

Business Skills

Soft Skills

Vocabulary

Languages

Engineering

Health Sciences

English

Math

Other Major Subjects

Browse all subjects

Browse all tests

Most popular tests