Post Session Quiz - Fundamentals Of Foreign Exchange Products

6 Questions | Attempts: 38
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  • 1/6 Questions

    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 forward contract
    • A foreign exchange option.
    • A spot contract.
    • A swap
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  • 2. 

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

    • Right to buy

    • Right to Sell

    • Obligation to Buy

    • Obligation to Sell

    Correct Answer
    A. Right to buy
  • 3. 

    The U.S. dollar will appreciate if:

    • The U.S. inflation rate falls

    • The Euro interest rate rises

    • The U.S. dollar is expected to deprciate

    • 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?

    • UK tourists going on holiday

    • Boeing (US aircraft manufacturer) buying engines from Rolls-Royce in the UK

    • A UK speculator buying shares on the New York Stock Exchange

    • 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?

    • Sell USD and buy Sterlings in the open market

    • Build up foreign exchange reserves

    • Increase government expenditure and cut taxation

    • 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

    • $500 billion

    • $4 trillion

    • $100 million

    • $300 million

    Correct Answer
    A. $4 trillion

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  • Current Version
  • Mar 20, 2022
    Quiz Edited by
    ProProfs Editorial Team
  • Aug 27, 2012
    Quiz Created by
    Anurag_quiz
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