Post Session Quiz - Fundamentals Of Foreign Exchange Products

6 Questions | By Anurag_quiz | Last updated: Mar 20, 2022 | Total 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
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
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
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
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
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

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