BMC CURRENCIES EXAM SCRIPT 2026 FULL
SOLUTION PRACTICE
◉ on June 23. 2016, the UK voted to leave the EU.... Answer: They are
probably heavy exporters
◉ In early 2016, the same Germany machinery company has interest
from four prospective clients.... Answer: Indonesia
◉ What is the median estimate for the number of Japanese yen per
euro for calendar year 2020? Answer: 126
◉ What is the difference between Norma and RBC's estimate for the
Japanese yen/euro... Answer: 40 yen
◉ Imagine you are a Dutch diamond dealer who sources diamonds
from south africa Answer: EUR 4,717 more
◉ Why would Jack Welch suggest putting all company plants on
barges? Answer: To respond quickly to changes in the currency
markets.
,◉ Samsung is based in South Korea and reports in South Korean
won.... Answer: Dollar
◉ Legendary investor Warren Buffett said, "Gold gets dug out of the
ground..... Then we melt it down, dig another hole, bury it again and
pay people to stand around guarding it. It has no utility. Anyone
watching from Mars would be scratching their head." Based on this
quotation, what quality of gold is he referring to? Answer: Its storage
costs
◉ Which of the following options is the best way for investors to
manage currency risk? Answer: By locking in forward rates for
known foreign payments.
◉ What does the Big Mac index show? (A) Answer: a) How
currencies may be overvalued or undervalued
b) How the Economist magazine estimates inflation
c)How the law of one price is true of consumer products
d)How interest rates and inflation affect value
◉ Which of the following are short-term drivers of currency
valuation? (A) Answer: a)Surprise charges in interest rates, inflation,
and trade
b)Surprise changes in interest rates, inflation, and gold
c)Surprise changes in relative prices, trade, and gold
, d)Surprise changes in relative prices, inflation, and trade
◉ By what mechanism do interest rates affect currency values? (C)
Answer: a)High interest rates slow an economy and make it less
attractive to investors
b)Changes in interest rates directly influence the value at which a
currency is pegged
c)Global investors are attracted by higher bond yields in high
interest rate countries
d)High interest rates make the currency safer
◉ According to the Big Mac index screen, which of the following four
countries' currency is the most undervalued? (D) Answer: a)United
States
b)Thailand
c)Brazil
d)China
◉ What generally happens when a central bank unexpectedly
increases interest rates? (D) Answer: a)The currency weakens, then
strengthens.
b)The currency strengthens, then weakens.
c)The currency weakens
d)The currency strengthens
SOLUTION PRACTICE
◉ on June 23. 2016, the UK voted to leave the EU.... Answer: They are
probably heavy exporters
◉ In early 2016, the same Germany machinery company has interest
from four prospective clients.... Answer: Indonesia
◉ What is the median estimate for the number of Japanese yen per
euro for calendar year 2020? Answer: 126
◉ What is the difference between Norma and RBC's estimate for the
Japanese yen/euro... Answer: 40 yen
◉ Imagine you are a Dutch diamond dealer who sources diamonds
from south africa Answer: EUR 4,717 more
◉ Why would Jack Welch suggest putting all company plants on
barges? Answer: To respond quickly to changes in the currency
markets.
,◉ Samsung is based in South Korea and reports in South Korean
won.... Answer: Dollar
◉ Legendary investor Warren Buffett said, "Gold gets dug out of the
ground..... Then we melt it down, dig another hole, bury it again and
pay people to stand around guarding it. It has no utility. Anyone
watching from Mars would be scratching their head." Based on this
quotation, what quality of gold is he referring to? Answer: Its storage
costs
◉ Which of the following options is the best way for investors to
manage currency risk? Answer: By locking in forward rates for
known foreign payments.
◉ What does the Big Mac index show? (A) Answer: a) How
currencies may be overvalued or undervalued
b) How the Economist magazine estimates inflation
c)How the law of one price is true of consumer products
d)How interest rates and inflation affect value
◉ Which of the following are short-term drivers of currency
valuation? (A) Answer: a)Surprise charges in interest rates, inflation,
and trade
b)Surprise changes in interest rates, inflation, and gold
c)Surprise changes in relative prices, trade, and gold
, d)Surprise changes in relative prices, inflation, and trade
◉ By what mechanism do interest rates affect currency values? (C)
Answer: a)High interest rates slow an economy and make it less
attractive to investors
b)Changes in interest rates directly influence the value at which a
currency is pegged
c)Global investors are attracted by higher bond yields in high
interest rate countries
d)High interest rates make the currency safer
◉ According to the Big Mac index screen, which of the following four
countries' currency is the most undervalued? (D) Answer: a)United
States
b)Thailand
c)Brazil
d)China
◉ What generally happens when a central bank unexpectedly
increases interest rates? (D) Answer: a)The currency weakens, then
strengthens.
b)The currency strengthens, then weakens.
c)The currency weakens
d)The currency strengthens
