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Free CFA Economics Practice Questions & Answers

200 exam-style Economics questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.

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Question 1

A dealer quotes GBP/USD at 1.2800 / 1.2806. What does 1.2806 represent?

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Question 2

A currency pair’s bid–ask spread widens sharply. What is the most likely cause?

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Question 3

A client “hits the bid” in EUR/JPY. What did they do?

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Question 4

Which factor most reliably narrows bid–ask spreads?

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Question 5

A dealer quotes USD/CAD at 1.3500 / 1.3510. What is the spread in pips?

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Question 6

You observe: EUR/USD = 1.2000, USD/JPY = 150, EUR/JPY = 180. Is there an arbitrage?

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Question 7

Triangular arbitrage becomes impossible when:

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Question 8

If EUR/USD × USD/CHF ≠ EUR/CHF, what exists?

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Question 9

Arbitrageurs profit by:

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Question 10

Triangular arbitrage requires:

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Question 11

If the forward rate of GBP/USD is higher than the spot rate, GBP is trading at:

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Question 12

A forward premium most likely reflects:

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Question 13

If domestic interest rates rise relative to foreign rates, the domestic currency’s forward value will:

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Question 14

A forward contract’s value at initiation is:

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Question 15

Covered interest parity holds when:

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Question 16

Uncovered interest parity differs from covered interest parity because it:

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Question 17

If uncovered interest parity holds, the currency with the higher interest rate should:

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Question 18

Deviations from uncovered interest parity explain:

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Question 19

Covered interest parity fails most often when:

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Question 20

PPP suggests that currencies adjust to offset differences in:

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Question 21

PPP is most reliable when:

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Question 22

A country with higher inflation should see its currency:

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Question 23

PPP tends to fail in the short run because:

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Question 24

If PPP holds, the real exchange rate should be:

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Question 25

A forward contract on USD/CHF becomes more valuable to the buyer when:

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Question 26

A forward contract’s value becomes positive for the seller when:

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Question 27

If the domestic interest rate rises while the foreign rate stays constant, the domestic currency’s forward value will:

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Question 28

A forward contract is fairly priced when:

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Question 29

Covered interest parity ensures that:

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Question 30

Uncovered interest parity assumes investors:

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Free CFA Economics Practice Questions & Answers

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Before you go, can we ask you one thing?

Thank you