Quiz 6: Fundamental Analysis

Which of the following best describes fundamental analysis?

• Analysis of past price action to determine future price movements

• Analysis based on fixed convictions

• Analysis of investor risk appetite

• Analysis of the forces that influence the economy

The fed announces an interest rate increase by 0.30%. Analysts did not expect this rate hike. What will happen to the U.S. dollar?

• It will increase

• It will decrease

• Nothing. The fed interest rate has nothing to do with the U.S dollar rates

• Impossible to predict

In the monthly press conference, the president of the ECB announces that the inflation of the eurozone came in higher than expected. What is very likely to happen?

• EURO will probably fall

• EURO will probably rise

• Nothing. Inflation data will not affect the EURO

• ECB will lower interest rates

What is more likely to happen to JPY when the Japanese Finance Ministry stimulates the economy by providing more liquidity to the monetary system?

• Fall, because traders will lose faith in the Japanese economy

• Fall, because JPY will be worth less

• Rise, because JPY will be worth more

• Rise, because traders expect Nikkei Index to go up

Existing home sales have increased in the U.S in the past month. Is the impact to the U.S dollar good, bad or neutral?

• Bad. When people sell off their houses, they become homeless.

• Good. Increased in home sales shows that people are confident about the economy.

• Bad. When people are spending more U.S dollars to buy homes, the dollar will decline in value.

• Neutral. Home sales figures have absolutely no impact on the U.S dollar.

German employment has declined in an unexpected manner. Will this impact the EURO?

• No, employment data won't affect the forex markets

• No, Germany economy's impact is way to small to affect the Eurozone

• There is a 50% chance that it will have an effect

• Yes. The German economy is by far the biggest in the Eurozone.

Which of the following will affect the supply and demand of a currency in the forex market?

• Trade flows

• Investment flows

• Money supply

• Investor fear

• All of the above

Which of the following is not a central bank?

• Bank of Japan

• Swiss National Bank

• United Overseas Bank

• Federal Reserve

Which is the best resource to find a country's growth rate data and inflation data?

• Your broker

• Central bank website

• CNBC

• Newspaper