WorksheetsForeign Exchange Risk Worksheet (Grade 13)
Total questions: 30
Worksheet time: 15mins
Currency risk refers to:
Loss caused by rate changes
Loss caused by price shifts
Loss caused by tax changes
Loss caused by demand shifts
Main types of currency risk are:
One major category
Two basic categories
Three core categories
Four common categories
Transaction risk appears when:
Short-term payments occur
Long-term loans are issued
Internal audits are made
Domestic sales are done
Translation risk occurs when:
Local sales are counted
Foreign reports are merged
Taxes are recalculated
Wages are adjusted
Economic risk involves:
Short-term cash changes
Long-term value effects
Daily market shifts only
Internal budget changes
FX risk affects firms that:
Work with one currency
Work with no imports
Work with many markets
Work with fixed prices
Exchange rate movements affect:
Only reported assets
Only firm liabilities
Both cash and profits
Only product prices
FX risk management helps to:
Reduce currency losses
Increase sales volume
Improve staff skills
Lower tax payments
Natural hedging uses:
Operating adjustments
Only forward deals
Only option trades
Only futures deals
Derivatives in hedging help to:
Protect against volatility
Increase total demand
Reduce staff workload
Support brand growth
A forward contract is:
A private future deal
A public market deal
A daily spot trade
A direct cash sale
A futures contract is:
Standardized exchange trade
Customized private deal
A simple cash transfer
A short-term deposit
An option premium is:
Price paid for the option
Fee for swap services
Tax for FX trading
Bank reporting cost
A call option gives:
Right to buy currency
Right to sell currency
Duty to sell currency
Duty to buy currency
An FX swap includes:
Spot and forward legs
Daily cash transfers
Fixed-rate deposits
Long-term bonds
A risk-sharing deal means:
Both sides share impact
One side takes all loss
Only gains are shared
Only fees are shared
Dynamic hedging means:
Hedge ratio is adjusted
Hedge ratio is fixed
Only swaps are used
Only cash is used
Portfolio hedging covers:
Net exposure as a whole
Each currency separately
Only dollar positions
Only euro positions
VaR is used to measure:
Possible loss levels
Total annual profit
Required staff count
Daily cash needs
Cash-flow-at-risk shows:
Risk in future cash
Change in revenue
Change in demand
Change in assets
A bank’s FX position is:
FX asset–liability gap
Total branch network
Internal staff number
Total annual deposits
An open position leads to:
Higher currency risk
Lower service fees
Higher credit supply
Lower FX turnover
A long position means:
More currency assets
More currency debts
No FX exposure
No FX accounts
A short position means:
Currency deficit exists
Currency surplus exists
Market risk is zero
Interest rate is fixed
Banks avoid overnight FX because:
Rates may shift widely
Staff may leave early
Offices close sooner
Software updates stop
Intraday FX risk is handled by:
Treasury trading teams
Marketing specialists
HR management staff
Customer support team
FX limits represent:
Maximum allowed exposure
Minimum wage payments
Standard audit levels
Branch opening rules
FX swaps help banks by:
Reducing short-term risk
Increasing long-term debt
Raising operating costs
Lowering branch counts
A structural position is:
Long-term FX exposure
Short-term cash deficit
Daily trading volume
Fixed-rate investment
Banks reduce FX exposure by:
Using hedging tools
Hiring more staff
Closing old branches
Cutting advertisements
