A bank has been asked to provide a three-month forward EUR/USD 'buy' quote for a corporate client.The following information is available to the FX dealer at the bank: \[\begin{array} { | l | l | l | } \hline & { \text { Bid } } &{ \text { Offer } } \\ \hline \text { Spot EURUSD } & 1.0770 & 1.0782 \\ \hline \text { 3-month US interest rate } & 3.75 \% \text { p.a. } & 3.85 \% \text { p.a. } \\ \hline \text { 3-month euro interest rate } & 2.65 \% \text { p.a. } & 2.75 \% \text { p.a. } \\ \hline \end{array}\] Calculate the bid and ask a three-month forward rate.

A) EUR/USD 1.0796-1.0781 B) EUR/USD 1.0797-1.0782 C) EUR/USD 1.0738-1.0755 D) EUR/USD 1.0743-1.0750 A) EUR/USD 1.0796-1.0781 B) EUR/USD 1.0797-1.0782 C) EUR/USD 1.0738-1.0755 D) EUR/USD 1.0743-1.0750

Exam 15: Foreign Exchange: The Structure and Operation of the Fx Market

An Australian company is to export electronic equipment into Europe,in particular Germany and Sweden,and needs to consider the exchange rate implications of conducting business in euros and Swedish kroner.Spot rates quoted are: USD/EUR 0.9275-85 USD/SEK 8.4531-41 Calculate the EUR/SEK cross-rate.

(Multiple Choice)

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Question 21

The FX brokers quote two-way prices at which they are prepared both to buy and sell foreign currencies and act as principals in the FX markets.

(True/False)

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Question 22

Given that AUD/USD (spot)is 0.6830-40 and the six-month forward rate is 0.6798-0.6813,the six-month forward points must have been falling.

(True/False)

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Question 23

An Australian company has received USD in payment for goods exported.At the time of receiving the USD,the exchange rate is quoted as AUD/USD 0.5650.Rather than immediately converting the USD into AUD,the company decides to 'speculate' on a favourable movement in the exchange rate.In 'today + n days' the exchange rate is AUD/USD 0.5750.Which of the following statements is correct?

(Multiple Choice)

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Question 24

Which of the following statements in relation to the operation of the FX market is incorrect?

(Multiple Choice)

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Question 25

In the FX markets,the spot exchange rate can be defined as the:

(Multiple Choice)

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Question 26

If the spot rate is AUD/USD 0.5526-0.5531 and the 90-day forward rate is AUD/USD 0.5578-0.5588,the AUD is trading at a/an:

(Multiple Choice)

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Question 27

Calculate the current exchange rate GBP/JPY,given these two quotes: USD/JPY 114.20-30 GBP/USD 1.6750-60

(Multiple Choice)

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Question 28

Calculate the current exchange rate AUD/GBP,given these two quotes: AUD/USD 0.5640-50 GBP/USD 1.5850-60

(Multiple Choice)

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Question 29

In general,the foreign exchange dealer's bid-offer spread _______ with increased volatility of FX.

(Multiple Choice)

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Question 30

Most foreign exchange transactions are conducted:

(Multiple Choice)

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Question 31

The first currency mentioned in an FX quote is called the:

(Multiple Choice)

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Question 32

If the forward exchange rate is priced higher than the spot rate the currency is said to be trading at a:

(Multiple Choice)

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Question 33

In general,multi-million transactions _______ the foreign exchange dealer's bid-offer spread.

(Multiple Choice)

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Question 34

A bank has been asked to provide a three-month forward EUR/USD 'buy' quote for a corporate client.The following information is available to the FX dealer at the bank: Bid Offer Spot EURUSD 1.0770 1.0782 3-month US interest rate 3.75\% p.a. 3.85\% p.a. 3-month euro interest rate 2.65\% p.a. 2.75\% p.a. Calculate the bid and ask a three-month forward rate.

(Multiple Choice)

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Question 35

A difference arises between the bid and offer rates of foreign currency because:

(Multiple Choice)

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Question 36

All of the following are primary centres of foreign exchange trading except:

(Multiple Choice)

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Question 37

The convention in the FX markets is the currency on the left hand side of a quote is:

(Multiple Choice)

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Question 38

A managed float exchange rate regime is one which limits exchange rate movements within a band that is set by:

(Multiple Choice)

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Question 39

Which of the following principles refers to the circumstance that interest rates in different countries provide equal returns,taking into account the spot and forward exchange rates between the two countries?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 108

An Australian company is to export electronic equipment into Europe,in particular Germany and Sweden,and needs to consider the exchange rate implications of conducting business in euros and Swedish kroner.Spot rates quoted are: USD/EUR 0.9275-85 USD/SEK 8.4531-41 Calculate the EUR/SEK cross-rate.

The FX brokers quote two-way prices at which they are prepared both to buy and sell foreign currencies and act as principals in the FX markets.

Given that AUD/USD (spot)is 0.6830-40 and the six-month forward rate is 0.6798-0.6813,the six-month forward points must have been falling.

Which of the following statements in relation to the operation of the FX market is incorrect?

In the FX markets,the spot exchange rate can be defined as the:

If the spot rate is AUD/USD 0.5526-0.5531 and the 90-day forward rate is AUD/USD 0.5578-0.5588,the AUD is trading at a/an:

Calculate the current exchange rate GBP/JPY,given these two quotes: USD/JPY 114.20-30 GBP/USD 1.6750-60

Calculate the current exchange rate AUD/GBP,given these two quotes: AUD/USD 0.5640-50 GBP/USD 1.5850-60

In general,the foreign exchange dealer's bid-offer spread _______ with increased volatility of FX.

Most foreign exchange transactions are conducted:

The first currency mentioned in an FX quote is called the:

If the forward exchange rate is priced higher than the spot rate the currency is said to be trading at a:

In general,multi-million transactions _______ the foreign exchange dealer's bid-offer spread.

A difference arises between the bid and offer rates of foreign currency because:

All of the following are primary centres of foreign exchange trading except:

The convention in the FX markets is the currency on the left hand side of a quote is:

A managed float exchange rate regime is one which limits exchange rate movements within a band that is set by:

Which of the following principles refers to the circumstance that interest rates in different countries provide equal returns,taking into account the spot and forward exchange rates between the two countries?

A Modern Financial System: An Overview

Commercial Banks

Non-Bank Financial Institutions

The Share Market and the Corporation

Corporations Issuing Equity in the Share Market

Investors in the Share Market

Forecasting Share Price Movements

Mathematics of Finance: An Introduction to Basic Concepts and Calculations

Short-Term Debt

Medium-To-Long-Term Debt

International Debt Markets

Government Debt, monetary Policy and the Payments System

An Introduction to Interest Rate Determination and Forecasting

Interest Rate Risk

Foreign Exchange: Factors That Influence the Exchange Rate

Foreign Exchange: Risk Identification and Management

An Introduction to Risk Management and Derivatives

Future Contracts and Forward Rate Agreements

Options

Interest Rate Swaps, Cross-Currency Swaps and Credit Default

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