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Which of the following currency risks could only be hedged by a non deliverable forward (NDF)?

A.

An exposure in Singapore Dollar (SGD)

B.

An exposure in Thai Baht (THB)

C.

An exposure in Philippine Peso (PHP)

D.

An exposure in Hong Kong Dollar (HKD)

Why is the use of netting systems encouraged?

A.

To avoid too heavy a workload for operations staff

B.

To reduce settlement and credit risk

C.

To enhance the straight through processing

D.

To reduce the brokerage fees

Which of the following is caracteristical of a CD?

A.

A CD is a certificate for a gold deposit

B.

The CD issuer can redeem the certificate at any time

C.

It is a non-negotiable instrument

D.

A CD is a certificate for a time deposit

Confirmation is a function that can be performed by:

A.

Any dealer as long as he/she is not a party to the trade

B.

Back-office/operations staff

C.

Dealing room staff who are not currently dealing

D.

Any staff outside the dealing room

With regard to operational risk awareness, which of the following best practices is incorrect?

A.

A report describing operational risks, the most significant incidents and corrective plans of action should be established on a quarterly basis.

B.

It is good practice to collect and analyze incidents and near-misses so as to set up preventive action plans for the future.

C.

Every time a report describing operational risks is produced, it should be provided to senior management.

D.

Whenever possible action plans should be put in place that mitigate operational risks that have been identified.

If today is Thursday, 12 December, what is the spot date for a EUR/USD transaction?

A.

14 December

B.

15 December

C.

16 December

D.

17 December

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 contracts maturity date

Which of the following statements apply to an FX Swap?

A.

It consists of two separate transactions, dealt with two different counterparties.

B.

It replaces a pair of foreign exchange transactions.

C.

It fully eliminates counterparty risk.

D.

It reduces credit risk with the counterparty, as compared to money market deals.

Which clearing system allows a transfer to be settled with immediate finality?

A.

EAF

B.

EBA

C.

RTGS

D.

SWIFT

Which of the following processes are offered by the CLS settlement system?

A.

The close-out process

B.

The customer matching process

C.

The settlement process

D.

The securities lending process