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A dealer belongs to:

A.

The compliance staff

B.

The middle office staff

C.

The front office staff

D.

The back office staff

As far as interest rate swaps are concerned, which risk is reduced or eliminated when a close-out netting agreement is in place?

A.

Replacement risk

B.

Volatility risk

C.

Commercial risk

D.

Market risk is reduced to a predefined amount

A bond selling at a discount will be selling for:

A.

Less than 100%

B.

100%

C.

More than 100%

D.

More than a bond selling at a premium

Settlement risk is:

A.

The risk that a bank makes its payment but does not receive a return payment in the exchanged currency

B.

The risk that exchange rates move against a bank’s position

C.

The risk a counterparty defaults on a contract and a bank has to replace that contract at adverse rates

D.

The risk of a disaster that disables a bank’s trading floor

Under normal circumstances, which of the following is a non-negotiable instrument?

A.

A Medium Term Note

B.

A Banker’s Acceptance

C.

A Money Market Deposit

D.

A Treasury Bill

As to deal confirmations, who is your counterparty on futures contracts?

A.

The futures exchange itself

B.

The clearing house of the futures exchange

C.

Your broker

D.

The ISDA

Which one of the following bonds uses variable rates?

A.

Bond warrants

B.

Reverse convertibles

C.

Zero coupons

D.

Mini-Max (collared) FRN

What is the Bank Identifier Code (BIC)?

A.

A worldwide unique identification code for both financial and non-financial institutions

B.

A unique identification code for European financial institutions

C.

The short form of the IBAN-code

D.

A unique access-code to SWIFT-platforms

The exercise price (strike price) of an option contract is:

A.

The price of the underlying instrument at the time of the transaction

B.

The price at which the transaction on the underlying instrument will be carried out if the option is exercised

C.

The price the buyer of the option pays to the seller when entering into the options trade

D.

The price at which the two counterparties can closeout their position

Which of the following are products used in bank liquidity management?

A.

Money market taking and placing, sale and repurchase agreements (repos)

B.

Currency options and currency futures

C.

Spot FX transactions

D.

Caps, floors, collars, and interest rate futures