Post Session Quiz - Fundamentals Of Foreign Exchange Products

6 Questions | By Anurag_quiz | Updated: Mar 20, 2022 | Attempts: 38

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1.

If a privately negotiated contract contains a promise that a specified amount of foreign currency will be delivered on the specified date in the future, this is:
- A.
  
  A forward contract
- B.
  
  A foreign exchange option.
- C.
  
  A spot contract.
- D.
  
  A swap
Correct Answer
A. A forward contract
2.

The U.S. dollar will appreciate if:
- A.
  
  The U.S. inflation rate falls
- B.
  
  The Euro interest rate rises
- C.
  
  The U.S. dollar is expected to deprciate
- D.
  
  The U.S. inflation rate rises
Correct Answer
A. The U.S. inflation rate falls
3.

The forex market is highly liquid, often exceeding _________ USD a day in total trading
- A.
  
  $500 billion
- B.
  
  $4 trillion
- C.
  
  $100 million
- D.
  
  $300 million
Correct Answer
B. $4 trillion
4.

Which of the following increases the demand for sterling on the foreign exchange market?
- A.
  
  UK tourists going on holiday
- B.
  
  Boeing (US aircraft manufacturer) buying engines from Rolls-Royce in the UK
- C.
  
  A UK speculator buying shares on the New York Stock Exchange
- D.
  
  ICI (a UK firm) buying raw materials from overseas
Correct Answer
B. Boeing (US aircraft manufacturer) buying engines from Rolls-Royce in the UK
5.

If the GBP was depreciating against USD rapidly and the Bank of England wanted to intervene, then what would they do?
- A.
  
  Sell USD and buy Sterlings in the open market
- B.
  
  Build up foreign exchange reserves
- C.
  
  Increase government expenditure and cut taxation
- D.
  
  Buy USD and Sell Sterlings in the Open Market
Correct Answer
A. Sell USD and buy Sterlings in the open market
6.

Call option gives the option buyer ---------------- in the future
- A.
  
  Right to buy
- B.
  
  Right to Sell
- C.
  
  Obligation to Buy
- D.
  
  Obligation to Sell
Correct Answer
A. Right to buy

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Current Version
Mar 20, 2022

Quiz Edited by
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Aug 27, 2012

Quiz Created by
Anurag_quiz

Post Session Quiz - Fundamentals Of Foreign Exchange Products

If a privately negotiated contract contains a promise that a specified amount of foreign currency will be delivered on the specified date in the future, this is:

The U.S. dollar will appreciate if:

The forex market is highly liquid, often exceeding _________ USD a day in total trading

Which of the following increases the demand for sterling on the foreign exchange market?

If the GBP was depreciating against USD rapidly and the Bank of England wanted to intervene, then what would they do?

Call option gives the option buyer ---------------- in the future