Define the following FX transactions

a) Spot

b) Forward

c) Forward-forward swap

2. Describe three types of swap transactions in the FX market

3. Define and give an example of a:

a) Bid rate quote

b) Ask rate quote

4. Convert the following direct to indirect and indirect to direct quotes

a) Euro: USD/EUR: 1.22 (to indirect)

b) Russia: USD/RBL 30 (to indirect)

c) Denmark DKR/USD: 0.1644 (to direct)

5. What is the difference between American and European terms in the FX markets?

6. You wish to convert S$ 1000 to Australian dollars and notice the following cross rates

USD/SGD: 1.3400

AUD/USD: 0.7640

What is the AUD/SGD exchange rate and how many A$ would you get for your S$?

7. You are training a new trader on forward rates and note the following quotes for the Swiss Franc. Explain what these quotes mean

Bid Rate USD/SFR 1.2575

Ask rate USD/SFR 1.2585

1 month forward 10 to 15

3 months forward 14 to 22

6 months forward 20 to 30

8. You note the following currency pairs and determine there is an arbitrage opportunity. Starting with (Swiss Francs) SFR12m determine the trades and the profit you can generate: USD/JPY: 92.00, USD/SFR 1.02, SFR/JPY: 90.00

9. Calculate the EUR/MXN cross rate from the following spot rates: USD/MXN: 12.45, USD/EUR0.7550

10. You note the following currency pairs and starting with EUR1,000,000, what trades would profit from this situation: EUR/USD: 1.1707, USD/KES: 108.6800, EUR/KES: 127.3316

11. Use the Bank of International Settlements triennial survey to determine the latest estimation of the size of the global FX market