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Exchange rates basics



The following questions are included in the quiz:

1. We say that the dollar appreciates relative to the euro if the exchange rate changes from
  1.  1 dollar for 0.80 euro to 1 dollar for 0.90 euro
  2.  1 dollar for 0.80 euro to 1 dollar for 0.70 euro

2. If 1 Turkish lira = 3 Swedish kronas, then 1 Swedish krona =
  1.  0.27 liras
  2.  0.30 liras
  3.  0.33 liras
  4.  0.37 liras
  5.  0.40 liras

3. If 100 yen = 1 dollar and 1 dollar = 0.80 euro, then
  1.  1 euro = 80 yen
  2.  1 euro = 90 yen
  3.  1 euro = 105 yen
  4.  1 euro = 115 yen
  5.  1 euro = 125 yen

4. If 1 Swiss Franc = 20 Thai Bhat and 1 Bhat = 2 Indian Rupee, then
  1.  1 Indian Rupee = 0.01 Swiss Franc
  2.  1 Indian Rupee = 0.015 Swiss Franc
  3.  1 Indian Rupee = 0.02 Swiss Franc
  4.  1 Indian Rupee = 0.025 Swiss Franc
  5.  1 Indian Rupee = 0.03 Swiss Franc

5. Everything else constant, an increase in expected stock market returns in Japan should lead to:
  1.  Dollar appreciation versus the Japanese yen
  2.  Dollar depreciation versus the Japanese yen
  3.  The price of the dollar will not change
  4.  The outcome is uncertain

6. Everything else constant, an increase in US imports from Mexico should lead to:
  1.  Dollar appreciation versus the peso
  2.  Dollar depreciation versus the peso
  3.  The price of the dollar will not change
  4.  The outcome is uncertain

7. Everything else constant, an increase in US interest rates should lead to:
  1.  Dollar appreciation
  2.  Dollar depreciation
  3.  The price of the dollar will not change
  4.  The outcome is uncertain

8. Expected future appreciation of the Brazilian real will produce a:
  1.  Depreciation of the real now
  2.  Appreciation of the real now
  3.  The change in the value of the real now is uncertain
  4.  There will be no change

9. If the demand for Mexican pesos increases and the central bank of Mexico wants to maintain a fixed exchange rate, they will need to ________ dollars in exchange for Mexican peso.
  1.  Buy
  2.  Sell

10. If foreign investors are selling off their Russian investments and taking the proceeds out of the country, the Russian Rouble will likely depreciate. To stop the depreciation, the Russian central bank has to ________ Roubles.
  1.  Buy
  2.  Sell

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