What is the maximum maturity of an unsecured USCP?

A.

One year

B.

270 days

C.

183 days

D.

5 years

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

Which of the following is typical of liquid assets held by banks under prudential
requirements?

A.

prices increase during a systemic crisis

B.

return on investment is relatively high

C.

absence of active market makers

D.

wide bid/offer spreads

Lending for 3 months and borrowing for 6 months creates a 3x6 forward-forward deposit. The cost of that deposit is called:

A.

Implicit nominal rate

B.

Implied forward rate

C.

Funding rate

D.

Effective future rate

You bought a CAD 8,000,000.00 6x9 FRA at 1.95%. The settlement rate is 3-month (90-
day) BBA LIBOR, which is fixed at 0.9500%.
What is the settlement amount at maturity?

A.

You pay CAD 20,000.00

B.

You receive CAD 20,000.00

C.

You pay CAD 19,952.61

D.

You receive CAD 19,952.61

You have quoted spot USD/CHF at 0.9423-26. Your customer says “I take 5”. What does he mean?

A.

He buys CHF 5,000,000.00 at 0.9423

B.

He buys CHF 5,000,000.00 at 0.9426

C.

He buys USD 5,000,000.00 at 0.9423

D.

He buys USD 5,000,000.00 at 0.9426

Assuming a flat yield curve in both currencies, when quoting a 1- to 2-month forward FX time option price in a currency pair trading at a discount to a customer:

A.

you would take as bid rate the bid side of the 2-month forward and as offered rate the offered side of the 1-month forward

B.

you would take as bid rate the offered side of the 2-month forward and as offered rate the bid side of the 1-month forward

C.

you would take as bid rate the offered side of the 1-month forward and as offered rate the offered side of the 2-month forward

D.

you would take as bid rate the bid side of the 1-month forward and as offered rate the bid side of the 2-month forward

Which of the following statements is true?

A.

Prices quoted by brokers should be taken to be firm in marketable amounts unless otherwise qualified

B.

Prices quoted by brokers should be taken to be indicative in marketable amounts unless otherwise qualified

C.

Prices quoted by brokers should be taken to be firm in amounts of 1,000,000.00 of the quoted currency unless otherwise qualified

D.

Prices quoted by brokers should be taken to be indicative in amounts of 1,000,000.00 of the base currency unless otherwise qualified

If you sell USD 3-month forward to a client against EUR, what should you do to hedge your position?

A.

Buy a 3-month EUR/USD outright forward

B.

Buy USD spot, and sell and buy a 3-month EUR/USD FX swap

C.

Sell EUR/USD in the spot market, lend EUR for 3 months and borrow USD for 3 months

D.

Sell EUR/USD in the spot market, borrow EUR for 3 months and lend USD for 3 months

The weighted average duration of liabilities can be increased by:

A.

buying additional 30-year German Government bonds

B.

selling futures contracts on 30-year German Government bonds

C.

buying futures contracts on 10-year German Government bonds

D.

exercising an early repayment option on a long-term senior borrowing