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EURIBOR is a:

A.

Daily fixing of EUR interest rates within the EMU zone

B.

Daily fixing of EUR interest rates in London

C.

A rate used for the settlement of USD FRAs between European counterparties

D.

The official successor to LIBOR rates

As to futures contracts:

A.

The maintenance margin is a predetermined fraction of initial margin

B.

The initial margin is a predetermined fraction of maintenance margin

C.

The maintenance margin represents the brokerage costs

D.

The maintenance margin represents management fees

Which of the following are primary markets?

A.

Auction markets conducted by the U.S. Treasury for U.S. Treasury bills

B.

The repo market

C.

The foreign exchange market

D.

The over-the-counter market for U.S. Government Bonds

Which SWIFT message formats would you use for a foreign exchange confirmation and fixed money market confirmation, respectively?

A.

MT 400, MT 950

B.

MT 200, MT 100

C.

MT 300, MT 950

D.

MT 300, MT 320

An interest rate CAP can be defined as:

A.

A series of American call options on FRAs

B.

A series of European call options on FRAs

C.

A series of American put options on FRAs

D.

A series of European put options on FRAs

Your FX swap dealer sold and bought 2 months USD/CHF 10,000,000.00; rates were set to 0.9300 against 0.9285. What payment is your bank expecting in two months from now?

A.

CHF 9,300,000.00

B.

CHF 10,770,059.24

C.

CHF 9,285,000.00

D.

USD 10,000,000.00

A month ago, a customer placed NZD 100,000.00 at 2.00% on a time deposit for 90 days. Today,

30 days later, he requests an anticipated close of his deposit. 2 and 3 month interbank rates are

2.10% bid and 2.20% offered. What do you do?

A.

You agree and pay back to the customer the capital plus 2.00% interest calculated on 30 days

B.

You agree and pay back to the customer the capital plus 2.00% interest on 30 days less your refinancing costs of 0.20% calculated on 30 days

C.

You agree and pay back to the customer the capital plus 2.00% interest on 30 days less your refinancing costs of 0.10% calculated on 60 days

D.

You agree and pay back to the customer the capital plus 2.00% interest on 90 days minus the actualization of this amount at 2.20% calculated over 60 days

Which of the following is the best description of a broken trade”?

A.

When a trade has been agreed to with dates (maturities) different from the standard dates

B.

When one of the parties to the deal unilaterally decides to withdraw from the on-going transaction

C.

When, due to a system break, one or both parties to the deal chooses to withdraw from the ongoing transaction

D.

When, due to a system break, one or both parties to the deal are unclear as to whether the deal has been done

When is the settlement amount of a FRA normally payable?

A.

At the beginning of the forward period

B.

On the trade date

C.

On the maturity (final) date

D.

At any time before the contract’s maturity date

Which risk factors fall under counterparty risk?

A.

Currency risk, interest rate risk and swap risk

B.

Settlement risk, delivery risk and replacement cost

C.

Operational risk

D.

Settlement risk and swap risk