WorksheetsFIM Week 10 Tutorial
Total questions: 6
Worksheet time: 6mins
Name
Class
Date
1.
The individual currencies of several European countries that are members of the Economic and Monetary Union of the European Union (EMU) were replaced by the euro, which was created on 1 January 1999. Which of the following is not a result of this development?
a)
The domestic currencies of EMU member countries have ceased to be legal tender.
b)
The EMU has removed several foreign currencies from the FX markets.
c)
The euro has become a hard currency.
d)
Operation of the FX market has been simplified by adoption of fixed exchange rates between the euro and the domestic currencies of EMU member countries.
2.
Introduction of the euro as a new currency had several effects. Which of the following is not a consequence of its introduction?
a)
The euro has become a hard currency.
b)
The liquidity of FX markets has declined.
c)
FX currency risk associated with transactions between EU member states has been reduced.
d)
Significant debt issues denominated in euro have been completed.
3.
Identify which of the following terms correctly refers to a contract being entered today to purchase EUR for settlement the day after tomorrow.
a)
tod value transaction
b)
tom value transaction
c)
spot contract
d)
forward contract
4.
On Monday, 21 May 20XX, an Australian importer enters into a spot transaction to buy USD. On what date will the contract be settled?
a)
Monday, 21 May
b)
Tuesday, 22 May
c)
Monday, 28 May
d)
Wednesday, 23 May
5.
It is Tuesday 27 August 20XX and an Australian importing company has to pay a US exporter USD870 000 within the next six weeks. The company enters into a forward exchange contract with a FX dealer for ‘one month forward delivery’ of USD. On what date will settlement of the forward transaction occur?
a)
29 August 20XX
b)
27 September 20XX
c)
28 September 20XX
d)
29 September 20XX
6.
A US firm with a receivable in yen receives the quote USD/JPY92.45. Which of the following is not correct?
a)
The USD is the base currency.
b)
The JPY is the terms currency.
c)
The quote shows the price of USD in terms of yen.
d)
The quote shows the price of yen in terms of USD.
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