Question 1

According to the 'purchasing power parity' (PPP), a McDonald's Big Mac in the UK should cost the same as:

Accepted Answer

A)  a Big Mac purchased in the US expressed in US dollars. 
B)  a Big Mac purchased in the US expressed in UK pounds sterling. 
C)  a Big Mac purchased in the US, transported to the UK, and consumed in the UK. 
D)  a Big Mac purchased in the US. 
A)  a Big Mac purchased in the US expressed in US dollars. 
B)  a Big Mac purchased in the US expressed in UK pounds sterling. 
C)  a Big Mac purchased in the US, transported to the UK, and consumed in the UK. 
D)  a Big Mac purchased in the US.

Question 2

Authorized FX dealers are subject to the:

Accepted Answer

A)  Fisher Effect. 
B)  Corporations law. 
C)  ASX rules. 
D)  auction marketplace. 
A)  Fisher Effect. 
B)  Corporations law. 
C)  ASX rules. 
D)  auction marketplace.

Question 3

The common code for the Australian dollar is:

Accepted Answer

A)  ALD. 
B)  AUC. 
C)  ASD. 
D)  AUD. 
A)  ALD. 
B)  AUC. 
C)  ASD. 
D)  AUD.

Question 4

A university student uses the FX market. The most likely reason for using the market is:

Accepted Answer

A)  borrowing. 
B)  travelling. 
C)  importing. 
D)  exporting. 
A)  borrowing. 
B)  travelling. 
C)  importing. 
D)  exporting.

Question 5

A cross- currency interest rate swap is a product under which the fixed- interest payments in one currency are exchanged for variable interest payments in another currency.

Accepted Answer

A) True 
 B)False

Question 6

The role of the foreign exchange (FX) market is to:

Accepted Answer

A)  regulate the flow of capital from one country to another. 
B)  provide a clearing house for exchange of currencies. 
C)  achieve equilibrium in the balance of payments. 
D)  all of the above. 
A)  regulate the flow of capital from one country to another. 
B)  provide a clearing house for exchange of currencies. 
C)  achieve equilibrium in the balance of payments. 
D)  all of the above.

Question 7

RBA intervention in the foreign currency market is designed to:

Accepted Answer

A)  fix the value of the AUD. 
B)  reduce volatility of the AUD. 
C)  hedge the AUD. 
D)  none of the above. 
A)  fix the value of the AUD. 
B)  reduce volatility of the AUD. 
C)  hedge the AUD. 
D)  none of the above.

Question 8

The forward exchange rate minus the spot rate equals the forward margin.

Accepted Answer

A) True 
 B)False

Question 9

An increase in exports from Australia will decrease the supply of foreign currency.

Accepted Answer

A) True 
 B)False

Question 10

An exchange rate that is agreed now and delivered in two days' time is known as a:

Accepted Answer

A)  futures rate. 
B)  spot rate. 
C)  forward rate. 
D)  swap rate. 
A)  futures rate. 
B)  spot rate. 
C)  forward rate. 
D)  swap rate.

According to the 'purchasing power parity' (PPP), a McDonald's Big Mac in the UK should cost the same as:

Authorized FX dealers are subject to the:

The common code for the Australian dollar is:

A university student uses the FX market. The most likely reason for using the market is:

A cross- currency interest rate swap is a product under which the fixed- interest payments in one currency are exchanged for variable interest payments in another currency.

The role of the foreign exchange (FX) market is to:

RBA intervention in the foreign currency market is designed to:

The forward exchange rate minus the spot rate equals the forward margin.

An increase in exports from Australia will decrease the supply of foreign currency.

An exchange rate that is agreed now and delivered in two days' time is known as a:

Financial Markets

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Introduction to Financial Calculations

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Exam 8: The Foreign Exchange Market

According to the 'purchasing power parity' (PPP), a McDonald's Big Mac in the UK should cost the same as:

Authorized FX dealers are subject to the:

The common code for the Australian dollar is:

A university student uses the FX market. The most likely reason for using the market is:

A cross- currency interest rate swap is a product under which the fixed- interest payments in one currency are exchanged for variable interest payments in another currency.

The role of the foreign exchange (FX) market is to:

RBA intervention in the foreign currency market is designed to:

The forward exchange rate minus the spot rate equals the forward margin.

An increase in exports from Australia will decrease the supply of foreign currency.

An exchange rate that is agreed now and delivered in two days' time is known as a:

Financial Markets

Debt Securities and Markets

Introduction to Financial Calculations

Banks and Other Deposit Taking Institutions

The Payments System

Managed and Superannuation Funds

Interest Rates, the Yield Curve and Monetary Policy

Listed Securities

Fixed Rate Derivatives

Options

Global Financial Crisis

Managing Foreign Exchange Risk

Managing Interest Rate Risk

Filters