Exam 2: The Foreign Exchange Market

Calculate the USD/AUD 3-months forward spread in percentage terms. You are given the following exchange rates:

Calculate the EUR/AUD cross OFFER rate. You are given the following exchange rates: ?

'Reciprocity' in the foreign exchange market refers to the practice by two foreign exchange dealers when they:

The substantial growth in the daily turnover in the Australian foreign exchange market, since deregulation in 1983, may be attributed to:

An 'exotic' currency is a currency:

In 2002, the AUD/USD exchange rate fell from 1.9585 to 1.7662. Calculate the percentage change in the Australian dollar against the U.S. dollar.

In order of importance, the following were the major currency pairs traded in 2007.

A price taker in the foreign exchange market is:

If the exchange rate between the Australian dollar and the U.S. dollar is expressed in direct quotation from an Australian perspective, then a rise in the exchange rate implies:

Dealer A quotes 1.7652/1.7672 for the AUD/USD exchange rate to Dealer B. The price (in U.S. dollars) at which B can buy one unit of the Australian dollar is:

A 'misquote' arises when a dealer:

A price maker in the foreign exchange market is:

In order of importance, the following were the major centres in which foreign exchange was traded in

If the exchange rate between the Australian dollar and the New Zealand dollar is expressed as AUD/ NZD, then this is:

In the foreign exchange market, price-takers:

If the AUD/USD forward spread is -5.00%, which interpretation is correct?

A foreign exchange broker earns income by:

You are given the exchange rate AUD/USD 1.7652/1.7672. Calculate the direct quote of the U.S. dollar from an American viewpoint.

If the AUD/USD exchange rate declines from 1.9585 to 1.7662, then the fall is equal to:

You are given the exchange rate AUD/USD 1.7662. Calculate the indirect quote of the Australian dollar from an Australian viewpoint.