Post Session Quiz - Fundamentals Of Foreign Exchange Products

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 forward contract

A foreign exchange option.

A spot contract.

A swap

Right to buy

Right to Sell

Obligation to Buy

Obligation to Sell

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

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

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

$500 billion

$4 trillion

$100 million

$300 million