3I0-010 Online Practice Questions and Answers

A collateral pool can be defined as:

A. assets lent by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

B. liabilities owned by members of a payments system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

C. assets owned by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

D. assets swapped by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

What does ISDA stand for?

A. International Swaps and Derivatives Association

B. Integrated System Data Association

C. International Swap Derivatives Agreement

D. Informative Software for Dealing Activities

Which of the following is essential for the effective and timely execution of outward payments?

A. confirmation of the exact processing time of the payment order with the central bank of your counterparty

B. the strict adherence to the cut-off times of your domestic payment system

C. confirmation of the time of processing of the payment order with your own central bank

D. the strict adherence to the cut-off times for payments made worldwide

What criteria should reconciliation escalation be based on?

A. it should be based on the days past settlement date, value and/or likely compensation

B. it should be based on the BIC-address and country

C. it should be based on bilateral limits

D. it should be based on the relationships of the institutions involved

Bank A has a large number of forward OTC trades with Bank B. What risks will be reduced by concluding a netting agreement?

A. market-price-risk and replacement risk

B. market-price-risk and delivery risk

C. replacement risk and delivery risk

D. replacement risk and basis risk

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.

Today is Friday, 28 July. Considering that there is a bank holiday in Switzerland on Tuesday, 1 August, what is the value date of a money market deal in CHF?

A. 31 July

B. 1 August

C. 2 August

D. 3 August

A "turn of the month" deposit would be a transaction:

A. value first business day of a month against last business day of the same month

B. value last business day of a month against first business day of the next month

C. value last business day of a month against last business day of the following month

D. value first business day of a month against first business day of the following month

Your dealer bought a 6x9 USD 4,000,000.00 FRA at 6.75%. Settlement is now due and 3 months (90 days) USD LIBOR is 5.50%. What amount do you pay or receive?

A. receive USD 12,330.46

B. pay USD 12,330.46

C. pay USD 12,163.81

D. receive USD 12,163.81

A forward rate agreement (FRA) is: A. a future rate agreement involving two different currencies

B. an interest rate agreement where buyer and seller will exchange an interest rate differential at a given date in the future

C. an interest rate to be applied to a loan or deposit that begins and matures in the future

D. an agreement to exchange cash flows starting on a specific date in the future