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 foreign exchange market?






2. What is arbitrage?






3. The euro faces risks fo recapitalization?






4. What is economic exposure?






5. What is the second issue with EFSF?






6. What is the first issue with EFSF?






7. According to economic theories of exchage rate determination?






8. What are the two ways to quote currency?






9. What is hedging?


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






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






12. What are some strategies for managing forex risk?






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






14. What is the law of one price?






15. What are the characteristics of economic exposure?






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






17. What is the second characteristic of lag strategy?






18. What are the types of Exchange Rate Fluctuations?






19. How can transaction exposure be described?






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






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






22. What is the characteristic of translation expose?






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






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






25. What is a forward rate?






26. What is the second characteristic of transaction exposure?






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






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






29. What is the second characteristic of lead strategy?






30. What are some factors that influence exchange rates?






31. What are the important trading centers?






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






33. What is a spot rate?






34. Most Transaction inovolve...






35. What is free convertible currency?






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






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






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






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






40. What holds true to Purchase Power Parity Theory?






41. How do you establish central control?






42. What is the third characteristic of transaction exposure?






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






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






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


46. What is non convertible currency?






47. What is the nature of the forex market?






48. What do monetary policies do?






49. What causes big mac prices to vary?






50. What is the first characteristic of lag strategy?