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 implications does understanding foreign exchange rates have on managers?






2. What is the first characteristic of lead strategy?






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






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






5. What is economic exposure?






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






7. When do countries use the foreign exchange market?






8. What are some characteristics of swaps?






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






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






11. What is the first characteristic of transaction exposure ?






12. What is the second issue with EFSF?






13. What is the characteristic of translation expose?






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






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






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






17. What is the first characteristic of lag strategy?






18. What is the nature of the forex market?






19. How can translation exposure be described?






20. What are the purposes of fiscal policies?






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






22. What is a spot rate?






23. What is a currency swamp?






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






25. How do you establish central control?






26. When do countries use foreign exchange market?






27. What is non convertible currency?






28. What is the fourth characteristic of transaction exposure?






29. What is externally convertible currency






30. According to economic theories of exchage rate determination?






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






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






33. What are the important trading centers?






34. What is arbitrage?






35. What is the second characteristic of lead strategy?






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






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






38. What is free convertible currency?






39. What holds true to Purchase Power Parity Theory?






40. What are the types of Exchange Rate Fluctuations?






41. Marekts are open...






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






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






44. The euro faces risks fo recapitalization?






45. What do monetary policies do?






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






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






48. What are other strategies for managing forex risk?






49. What is the law of one price?






50. What is the second characteristic of transaction exposure?