Foreign Exchange Rates

What is the foreign exchange market also known as?

• Real Estate Market

• Commodity Market

• FOREX

• Stock Market

Answer explanation

The foreign exchange market is also known as FOREX. It is not the real estate market, commodity market, or stock market.

What does the foreign exchange market rely upon to determine currency values?

• Supply and demand of money

• International treaties

• Global stock market trends

• Government regulations

Answer explanation

The foreign exchange market relies on the supply and demand of money to determine currency values.

Which of the following is true about exchange rates?

• Countries only accept trade in foreign currency

• Exchange rates refer to the value of one country's currency against another's

• Exchange rates are managed by domestic markets

• Global exchange rates are compared to the Euro

Answer explanation

Exchange rates refer to the value of one country's currency against another's.

What factor does NOT affect the purchasing power and demand for products in different countries?

• Political stability

• Government debt

• Net Export

• Interest rates

Answer explanation

Net Export does not affect the purchasing power and demand for products in different countries.

What does a stronger currency mean?

• It can purchase more of another country's currency

• It leads to inflation

• It can purchase less of another country's currency

• It has no impact on purchasing power

Answer explanation

A stronger currency means it can purchase more of another country's currency.

What is the formula to determine the exchange rate conversion from one currency to another?

• USD / Euro = EURO

• USD + Euro = EURO

• USD x Euro = EURO

• USD - Euro = EURO

Answer explanation

The formula to determine the exchange rate conversion from one currency to another is USD x Euro = EURO. This formula multiplies the amount in USD by the exchange rate of Euro to get the equivalent amount in EURO.

What does a depreciation of a currency mean?

• It has no impact on purchasing power

• It becomes weaker and purchases less of another country's currency

• It becomes stronger and purchases more of another country's currency

• It leads to deflation

Answer explanation

A depreciation of a currency means it becomes weaker and purchases less of another country's currency.

If the exchange rate is $1.00 USD = ¥123.68 Japanese Yen, how much does a shirt costing ¥20 cost in U.S. dollars?

• $0.08

• $0.24

• $0.12

• $0.16

Answer explanation

To convert Japanese Yen to U.S. dollars, divide the cost in Yen by the exchange rate. Therefore, a shirt costing ¥20 would cost $0.16 in U.S. dollars. The correct choice is $0.16.

If the exchange rate is $1.00 USD = ₪3.21 Israeli Shekel, how much does an automobile costing ₪30,000.00 cost in U.S. dollars?

• $9,346.00

• $9,345.20

• $9,345.80

• $9,345.60

Answer explanation

To convert Israeli Shekels to U.S. dollars, divide the cost in shekels by the exchange rate. Therefore, an automobile costing ₪30,000.00 would cost $9,345.60 in U.S. dollars. This is the correct choice.

If the exchange rate is $1.00 USD = S$1.359 Singapore Dollar, how much does a bottle of soda costing S$2.00 cost in U.S. dollars?

• $1.47

• $1.48

• $1.50

• $1.49

Answer explanation

To convert Singapore Dollars to U.S. dollars, divide the cost in SGD by the exchange rate. So, S$2.00 / S$1.359 = $1.47. Therefore, the cost of the soda in U.S. dollars is $1.47.