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3-month USD/CHF is quoted at 12/10. Interest rates in Switzerland are reduced but USD rates (which are higher) are unchanged. What would you expect the 3-month forward USD/CHF rate to be?

A.

unchanged

B.

15/13

C.

10/8

D.

6/4

Which of the following risks are considered market risks?

A.

interest rate, currency, equity and commodity risk

B.

interest rate, currency, equity and default risk

C.

interest rate, equity, liquidity and default risk

D.

legal, reputation and regulatory risk

What is the value date of a 1-month outright forward FX transaction dealt today, if today’s spot date is Monday, 30th January? Assume there are no bank holidays and that the year is not a leap year.

A.

2nd March

B.

1st March

C.

2gth February

D.

28th February

When can a broker consider a deal to be done?

A.

if he is confident that the dealer will not back out of the deal

B.

if both parties to the deal have established credit lines for each other

C.

if one party to the deal acknowledges interest

D.

if he receives acknowledgement from both the dealers involved

If several banks hit a broker simultaneously for an amount greater than the amount for which the price was shown:

A.

no transaction is done

B.

the broker has to honor each and every amount hit

C.

the broker has to split the amount among the banks on a pro rata basis

D.

the broker may freely choose the bank(s) he will deal with

According the Model Code, a principal, whose name has been rejected, feeling that the broker may have actually quoted a price or rate that it could not in fact substantiate, may:

A.

deduct points from the broker or adjust the brokerage bill accordingly

B.

in some centres, ask either the central bank or some other neutral body to investigate and confidentially verify that there was support for the original price or rate

C.

in some centres, ask the local ACI to investigate and confidentially verify that there was support for the original price or rate

D.

insist that the broker discloses the name of the other counterparty

Which one of the following bullion coins has a 999.9/1000 gold purity (.9999 fineness)?

A.

the Canadian “Maple Leaf”

B.

the South African “Krugerand”

C.

the American “Gold Eagle”

D.

the United Kingdom “Sovereign”

How many Yen would you pay to buy 1 ounce of gold if you were quoted the following?

XAU/USD 1575.25-75

USD/JPY 96.55-60

A.

JPY 152,090

B.

JPY 152,139

C.

JPY 152,169

D.

JPY 152,217

Which of the following statements is correct?

A.

With liquidity transfer pricing (LTP) banks attribute the costs, benefits and risks of liquidity to respective business units within a bank

B.

With liquidity transfer pricing (LTP) banks are monitoring and diversifying their funding base

C.

With liquidity transfer pricing (LTP) banks are agreeing with external liquidity providers on the fair market price of funds

D.

Liquidity transfer pricing charges providers of funds for the cost of liquidity and users of funds for the benefit of liquidity

USD/CHF is quoted to you at 0.9290-93 and GBP/USD at 1.5320-30. At what rate could you buy GBP and sell CHF?

A.

1.4242

B.

1.4232

C.

1.4246

D.

1.4237

Which of the following is always a secured instrument?

A.

ECP

B.

Repo

C.

Interbank deposit

D.

CD

An option is:

A.

The right to buy or sell a commodity at a fixed price

B.

The right to buy a commodity at a fixed price

C.

The right but not the obligation to buy or sell a commodity at a fixed price

D.

The right but not the obligation to buy a commodity at a fixed price

EURODOLLAR futures are:

A.

Traded on the Chicago Mercantile Exchange (CME Group) and have a face value of USD 500,000.00

B.

Traded on the Intercontinental Exchange (ICE) and have a face value of USD 1,000,000.00

C.

Traded on the Intercontinental Exchange (ICE) and have a face value of USD 500,000.00

D.

Traded on the Chicago Mercantile Exchange (CME Group) and have a face value of USD 1,000,000.00

A corporate wishing to hedge the interest rate risk on its floating-rate borrowing would:

A.

Sell interest rate caps

B.

Sell futures

C.

Sell FRAs

D.

Buy futures

Which of the following methods is a means of credit risk mitigation?

A.

entering into a plain vanilla IRS

B.

entering into collateral agreements

C.

hedging a portfolio’s USD exposure

D.

investing only in sizeable and liquid markets