Post Session Quiz - Fundamentals Of Foreign Exchange Products
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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:
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A forward contract
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A foreign exchange option.
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A spot contract.
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A swap
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- 2.
Call option gives the option buyer ---------------- in the future
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Right to buy
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Right to Sell
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Obligation to Buy
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Obligation to Sell
Correct Answer
A. Right to buy -
- 3.
The U.S. dollar will appreciate if:
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The U.S. inflation rate falls
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The Euro interest rate rises
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The U.S. dollar is expected to deprciate
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The U.S. inflation rate rises
Correct Answer
A. The U.S. inflation rate falls -
- 4.
Which of the following increases the demand for sterling on the foreign exchange market?
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UK tourists going on holiday
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Boeing (US aircraft manufacturer) buying engines from Rolls-Royce in the UK
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A UK speculator buying shares on the New York Stock Exchange
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ICI (a UK firm) buying raw materials from overseas
Correct Answer
A. 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?
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Sell USD and buy Sterlings in the open market
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Build up foreign exchange reserves
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Increase government expenditure and cut taxation
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Buy USD and Sell Sterlings in the Open Market
Correct Answer
A. Sell USD and buy Sterlings in the open market -
- 6.
The forex market is highly liquid, often exceeding _________ USD a day in total trading
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$500 billion
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$4 trillion
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$100 million
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$300 million
Correct Answer
A. $4 trillion -
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Current Version
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Mar 20, 2022Quiz Edited by
ProProfs Editorial Team -
Aug 27, 2012Quiz Created by
Anurag_quiz
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