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Test your basic knowledge |
Foreign Exchange Markets Vocab
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Study First
Subjects
:
business-skills
,
industries
Instructions:
Answer 15 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. Agreement to deliver/ to take delivery of certain # of F.C. immediately ( 2 buss Days)
Settlement
Speculation
Spot contract
Cross rate
2. Using one of the instruments in the F.X. market (spot - forward - future)
Settlement
Speculation
American Quote
Direct Quote
3. # of M.C for 1 unit of F.C.($0.005/
Settlement
2 point arbitrage
Trading Options
Direct Quote
4. Exchange rate between two foreign currencies x rate for Euro: :
Usage of F.X. market
Cross rate
Trading Options
Forward contract
5. Settlement - Speculation - Arbitrage (2 & 3 point) - Hedging
Indirect Quote
Usage of F.X. market
Direct Quote
2 point arbitrage
6. Transferring purchasing power from one currency to another currency
Cross rate
Settlement
FWD rate
Usage of F.X. market
7. Option 1: do nothing - sell X amount in future spot (uncertain) - Option 2: Hedging - Sell fwd X amount now (locked in rate)
Speculation
Direct Quote
Cross rate
Trading Options
8. $ equivalent value of 1 unit of F.C. (direct quote from American's point of view).
Forward contract
Indirect Quote
FWD rate
American Quote
9. Rate applied for forward contract (customarily quoted in multiples of 30 days) - exchg rate for future delivery is locked in at the time of FWD contract markets best estimate of future spot rate as of today
2 point arbitrage
Forward contract
Usage of F.X. market
FWD rate
10. F.C. equivalent value of $1 (direct quote from foreigner's point of view).
Direct Quote
Hedging
European Quote
FWD rate
11. # of F.C. for 1 unit of M.C.(
Indirect Quote
Hedging
2 point arbitrage
Trading Options
12. Triangular arbitrage - Temporary disequilibrium among the different F.X. markets makes this possible
2 point arbitrage
European Quote
3 point arbitrage
Trading Options
13. Agreement to deliver/ to take delivery of certain # of F.C. in the future
Hedging
Settlement
3 point arbitrage
Forward contract
14. Locational arbitrage - Temporary disequilibrium among the regional banks makes this arbitrage possible
Trading Options
Indirect Quote
American Quote
2 point arbitrage
15. Transaction in FWD market designed to minimize potential loss from ex. rate fluctuation
Hedging
Usage of F.X. market
European Quote
Speculation