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A bank in Luxembourg has dealt an interbank money market trade with a Canadian bank and must pay USD. Whom does the Luxembourg bank you instruct for payment?

A.

Its correspondent bank in Canada

B.

Its national central bank

C.

The European Central Bank

D.

Its correspondent bank in the USA

What is a correspondent bank?

A.

A bank which processes payment orders on behalf of another bank

B.

A bank which processes payment orders on national level only

C.

A bank which has subsidiaries in CLS-countries

D.

A bank which has a minimum reserve account in more than one country

What is the standard for settlement of cross-border DVP systems?

A.

T+3, meaning that settlement is due three days after the deal date

B.

T+4, meaning that settlement is due four days after the deal date

C.

T+1, meaning that settlement is due one day after the deal date

D.

T+2, meaning that settlement is due two days after the deal date

The market standard legal agreement for Interest Rate Swaps is:

A.

ISDA

B.

ACI

C.

SIFMA/ICMA

D.

ICMA

Loan/deposit input and mismatch analysis capability belongs to which module in a treasury system?

A.

The FX spot and forward dealing input and processing module

B.

Standard back office features

C.

The money market dealing and processing module

D.

The securities trading and processing module

What is the advantage of instantaneous matching?

A.

It gives the counterparty more time to cancel a deal

B.

It reduces errors and costs

C.

It gives front-office staff more time to process the payment orders

D.

It reduces the number of trades

A plain vanilla interest rate swap (IRS) is:

A.

An agreement to exchange one stream of interest payments for another (fixed against floating)

B.

A fixed rate leg in one currency and a fixed rate leg in another currency

C.

Two floating rate legs on different indexes

D.

An agreement to borrow and lend one currency for another at two different value dates

What are the consequences for credit risk when a collateral agreement is added to a netting agreement?

A.

A collateral agreement eliminates the future replacement risk

B.

A collateral agreement can reduce market risk

C.

A collateral agreement can reduce operational risk

D.

A collateral agreement can reduce the replacement risk

Sterling Treasury bills can be issued with maturities of:

A.

3 months, 6 months and 9 months

B.

1 month only

C.

Up to 2 years

D.

1 month, 3 months, 6 months and 12 months

A yield curve can be drawn for a wide variety of financial instruments. The most widely analyzed yield curves are those for benchmark instruments such as:

A.

Consumption and inflation levels

B.

Money market rates and government bonds

C.

Mortgage rates

D.

Commodities