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Test your Currency Forwards knowledge....

Page 1 Questions

This test is from the Quickstep online training module on Currency Forwards. At the end of the test you will be given your score. Full test results along with correct answers will be emailed to you.
Personal Details *This question is required.Please enter your first name, last name, company name and email
1. The TOD Absolute Return Fund executes the following 2 trades:                                                         
Trade A: Trade Date 1st August, Settlement Date, 3rd August, Buy HKD 12,000,000, Sell GBP 1,000,000
Trade B: Trade Date 2nd August, Settlement Date, 2nd September, Sell HKD 12,000,000, Buy GBP 1,100,000. On which date does the fund pay pounds? *This question is required.
2. In order to hedge currency risk in the portfolio, the investment manager of the TOD Absolute Return Fund prefers using currency forwards instead of other derivatives. Which of the following might be a valid reason for the use of currency forwards? *This question is required.
3. The investment manager of the TOD Absolute Return Fund receives the following GBPUSD quote from a currency trader : GBP 1 = USD 1.5500 / 1.5510. At which rate can the investment manager buy dollars? *This question is required.
4. The investment manager of the TOD Absolute Return Fund receives quotes from a currency trader. The fund can buy JPY and sell USD at a rate of USD 1 = JPY 102 for a trade settling in 2 days time. And the fund can buy JPY and sell USD at a rate of USD 1 = JPY 104 for a trade settling in 3 months time. Why is there a difference in these quotes? *This question is required.
5. The TOD Absolute Return Fund has executed the following 2 trades:                                                        

Trade C: Trade Date 1st October, Settlement Date, 3rd November, Buy EUR 1,400,000, Sell GBP 1,000,000.
Trade D: Trade Date 1st November, Settlement Date, 3rd November, Buy GBP 1,100,000, Sell EUR 1,400,000.

Identify the realised gain on 3rd November from the following. *This question is required.
6. Trade C in the previous question was revalued for the month-end valuation at 31st October using a rate of GBP 1 = EUR 1.38.  Identify the number to be included in the month end valuation for this currency forward. *This question is required.
7. The TOD Absolute Return Fund, which has a base currency of USD, holds Japanese equities. In order to hedge the currency risk of those equities, the investment manager should *This question is required.
8. The TOD Absolute Return Fund, which has a base currency of USD, has a EUR share class. In order to hedge the currency risk of the EUR share class NAV, the investment manager should *This question is required.
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