Using reprising gap analysis, a bank’s balance sheet is considered liability-sensitive to
market interest rate changes, if:

A.

more liabilities than assets will be reprised in the near term

B.

more assets than liabilities will be reprised in the near term

C.

more assets than liabilities have variable rates or short residual maturities

D.

non-interest bearing liabilities are greater than non-interest bearing assets

Which of the following is true regarding the consummation of a deal?

A.

Averbal agreements are considered binding

B.

Bwritten confirmations always override terms verbally agreed to

C.

deals agreed to verbally can be done subject to documentation

D.

verbal agreements are never to be considered legally binding

Which of the following dealing strategies involves the placing of orders with very short
quote lives into a market?

A.

frequency trading

B.

high-incidence trading

C.

flash trading

D.

liquidity aggregators

The popularity of FX-trading via Internet platforms has serious implications for the
applicability of traditional rules such as “Know Your Customer”. Which of the following are
correct?

A.

“Know Your Customer” rules cannot be applied online and banks will have to rely
instead on new safeguards such as third-party authentication.

B.

“Know Your Customer” rules apply only to retail customers and are therefore irrelevant
to currency trading.

C.

In practice, banks can avoid “Know Your Customer” rules by limiting online deal size to
EUR 100,000.00 or equivalent.

D.

No trading should be carried out without first identifying and setting up the counterparty;
this includes “Know Your Customer” procedures.

What is the ISO code for the Indian rupee?

A.

IDR

B.

RUP

C.

INR

D.

IND

By what means should a financial institution preferably submit SSI changes and
notifications to its clients?

A.

e-mail

B.

fax or letter

C.

MTn99 SWIFT message

D.

MT670/671 SWIFT message

You are a sales person in a bank and are about to sell a structured note to a nonprofessional
customer. Before finalizing the transaction you remember to double-check the
customer’s charter. You learn that the customer is not allowed to invest in structured
products. The risk you have avoided is most likely to be classified as:

A.

credit risk

B.

liquidity risk

C.

legal risk

D.

refinancing risk

What does the Model Code say about omitting the “big figure” in voice communication?

A.

The “big figure” should not be included in outright quotations.

B.

In order to avoid misunderstandings, the “big figure” should not be mentioned when repeating the details (facts/rates) of the deal.

C.

For the sake of brevity and efficiency, “big figures” should never be quoted at all in spot FX trading.

D.

The Model Code recommends that the “big figure” be included in all outright and spot FX quotations.

Where voicemail equipment is used for the reporting and recording of off-premises
transactions, voice mail should be:

A.

installed on secret number known only to the chief dealer

B.

installed and located in the office of the head of compliance

C.

installed and located in such a way that reported transactions cannot be subsequently
erased without senior management approval.

D.

securely saved by recordings that have to be stored for at least a twelve-month period

What is the day count/annual basis convention for JPY money market deposits?

A.

ACT/365

B.

ACT/360

C.

ACT/ACT

D.

30E/360