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Question 1 of 10

For the currency pair USD/JPY, a pip represents a one-digit movement in which decimal place?

A First
B Second
C Third
D Fourth

Explanation

In most cases, when the Japanese yen (JPY) is the counter currency, the second decimal place is the one to watch.

Question 2 of 10

Company QER is currently worth EUR5,000,000 and 10,000,000 shares have been issued. How much is one share worth in cent?

A 5 cent
B 20 cent
C 50 cent
D 200 cent

Explanation

The value of one share is the total company value divided by the number of shares issued. EUR5,000,000 ÷ 10,000,000 = EUR0.50 or 50 cent.

Question 3 of 10

Index DEF is capitalisation-weighted and represents the value of the following three stocks: - Company D has a share price of CHF5 with 200 shares issued - Company E has a share price of CHF2 with 1000 shares issued - Company F has a share price of CHF4 with 500 shares issued What is the value of Index DEF in CHF?

A CHF3000
B CHF400
C CHF4000
D CHF5000

Explanation

A capitalisation-weighted index takes the size of each company into account when calculating the value of the index as a whole:
(CHF5 x 200) + (CHF2 x 1000) + (CHF4 x 500)
= CHF1000 + CHF2000 + CHF2000
= CHF5000

Question 4 of 10

Which of the following isn't a commodity futures exchange?

A London International Financial Futures and Options Exchange (LIFFE)
B London Metal Exchange
C OMX Nordic Exchange
D New York Mercantile Exchange

Explanation

OMX Nordic Exchange is a stock exchange group based in Stockholm.

Question 5 of 10

Match the stock index to its corresponding country:

Clear

Explanation

FTSE 100 -> UK
DAX -> Germany
CAC 40 -> France
IBEX 35 -> Spain
Nikkei 225 -> Japan

Question 6 of 10

Match the following stock exchanges to their respective country:

Clear

Explanation

SIX -> Switzerland
LSE -> UK
NASDAQ -> USA
ASX -> Australia
TSX -> Canada

Question 7 of 10

Which of the following would be classed as 'hard' commodities?

Please select all answers that apply

Gold
Nickel
Barley
Heating Oil

Explanation

Hard commodities are generally mined from the ground, or taken from other natural resources, while barley is a farmed crop, so is classed as a 'soft' or 'agricultural' commodity.

Question 8 of 10

You decide to buy A$10,000 of AUD/USD at 0.74000, which costs you $7400. A few weeks later the sell price stands at 0.72000. If you close your position at 0.72000, how much profit/loss will you make in USD (not counting any charges or commission payments)?

A $200 loss
B $200 profit
C $2000 profit
D $2000 loss

Explanation

By buying this currency pair you expected the Australian dollar to strengthen against the US dollar. However, in this scenario it got weaker, with you paying $7400 to open the trade, but selling for $7200. This cost you $200.

Question 9 of 10

The size of one contract of Brent Crude oil is 1000 barrels. Let's say it's currently trading at $70 per barrel, and you decide to buy three contracts costing you $210,000 ($70 x 3000 barrels). Later, the price of Brent Crude is listed at $50 per barrel and you decide to close your position. How much profit/loss have you made (ignoring any charges or commission payments)?

A $60,000 profit
B $6000 loss
C $60,000 loss
D $600,000 profit

Explanation

You paid $210,000 but could only sell for $150,000. That means you'd have lost $60,000 in total ($210,000 - $150,000).

Question 10 of 10

Forex is traded in standard lots. How many units of currency does a standard lot represent?

A 1
B 10,000
C 100,000
D 10

Explanation

A standard lot is 100,000 units of currency. A mini lot represents 10,000 units, while a micro lot represents 1000.

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