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. Most Transaction inovolve...






2. When do countries use the foreign exchange market?






3. What is the first issue with EFSF?






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






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






6. How can translation exposure be described?






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






8. What is a currency swamp?






9. The euro faces risks fo recapitalization?






10. What is externally convertible currency






11. What is a spot rate?






12. What is the second characteristic of transaction exposure?






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






14. What is a forward rate?






15. What is the nature of the forex market?






16. What is the third characteristic of transaction exposure?






17. Marekts are open...






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






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






20. What is the second issue with EFSF?






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






22. What is hedging?

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

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24. What is arbitrage?






25. How do you establish central control?






26. What is the first characteristic of lead strategy?






27. When do countries use foreign exchange market?






28. What is free convertible currency?






29. What holds true to Purchase Power Parity Theory?






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






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






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






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






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






35. What is economic exposure?






36. What are other strategies for managing forex risk?






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






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






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






40. What is the first characteristic of transaction exposure ?






41. What are the types of Exchange Rate Fluctuations?






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






43. What are some factors that influence exchange rates?






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






45. What is the fourth characteristic of transaction exposure?






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






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






48. What is non convertible currency?






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






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