WorksheetsFOREX MARKET
Total questions: 15
Worksheet time: 15mins
when a country has a balance of trade deficit
it must make up the difference by shipping gold to its creditors
its exports exceeds its imports
its currency will appreciate
corrective actions must be taken
its imports exceeds its exports
if the value of the US dollar depreciates, ceteris paribus, then US
imports will rise
unemployment will rise
net exports will fall
exports will rise
net exports will be unaffected
if the demand for dollars rises while the supply of dollars falls, then the
dollar will appreciate
dollar will depreciate
exchange rates will be affected bu not the value of the dollar
exchange rate will not be affected
balance of trade will tend toward a surplus
The _____ is the price that an investor can sell a share of stock for.
Ask
Bid
Spread
Quote
If the exchange rate falls, then the expected profit from holding the currency
increases
decreases
does not change
can either increase or decrease
The bid-ask spread on an exchange rate can be used to directly determine:
how an exchange rate will change.
the transaction cost of foreign exchange.
the forward premium.
the currency option premium.
Devaluation is
Fall in the value of domestic currency in terms of foreign currency as a deliberate step adopted by the govt. under Fixed exchange rate system
Rise in the value of domestic currency in terms of foreign currency as a deliberate step adopted by the govt. under Fixed exchange rate system
Fall in the value of domestic currency in terms of foreign currency as a deliberate step adopted by the govt. under FLEXIBLE exchange rate system
The _______ is the rate at which a foreign exchange dealer converts one currency into another currency on a particular day.
Currency swap rate
Forward rate
Specific rate
Spot rate
The main objective of hedgers in currency futures markets is to .
make a profit
protect against exchange risk
make sure that foreign bills are collected
none of the above
Which of the following does not impact future exchange rate movements?
A country's price inflation
A country's interest rate
Market Psychology
A country's arbitrage opportunities
An increase in the price of goods & services that is representative of the economy as a whole
Exchange Rates
Inflation
Fisher Effect
Deflation
Depreciation is
Fall in the value of domestic currency in terms of foreign currency
Rise in the value of domestic currency in terms of foreign currency
none
What play the greatest part in what the exchange rate is?
Political situations between countries
The Dow Jones
the overall health of a country
Supply and Demand
How do you profit in the Forex Market?
You buy a currency when it is low hold it till it's rate increases and sell it for a profit.
You wait till the demand is high and buy the currency then sell it when there is a large supply.
Buy currencies where the country is having big problems and wait for them to get better then sell.
It's all about the timing. You buy a currency and then wait until midnight to sell it.
In the foreign exchange market for the Mexican peso, which of the following would best describe the exchange rate for the peso?
a. The interest rate earned from saving pesos
b. The price of a peso in terms of some other currency
c. The price of a good in Mexico in terms of another goods in Mexico
d.The price of a peso in terms of pesos
