foreign exchange MCQs – Page 3

Practise focused foreign exchange questions with marked answers for exam preparation and subject revision.

foreign exchange Mcqs
41. The fall in value of one currency relative to another is ?
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A. a floating of a currency

B. an appreciation of a currency

C. a strengthening of a currency

D. a depreciation of a currency
42. The reduction or covering of foreign exchange risk is called ?
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A. speculation

B. hedging

C. arbitrage

D. intervention

43. A difference between forward and futures contracts is that ?
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A. futures contracts have negotiable delivery dates

B. forward contracts can be tailored in amount and delivery date to the need of importers of exporters

C. futures contracts involve no brokerage fees or other transactions costs

D. forward contracts occur in a specific locations-for example, the Chicago Mercantile Exchange

44. In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies?
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A. decrease; depreciate

B. increase; depreciate

C. decrease; appreciate

D. increase; appreciate