Question 1

What usually happens to the collateral in a tri-party repo?

Options :

A : It is held by the seller in the name of the buyer

B : It is held by the tn-party agent in the name of the buyer

C : It is put at the disposal of the buyer

D : It is frozen in the sellers account with the tri-panty agent

Answer: B

Question 2

Where answer phone equipment is used for reporting and recording of off-premises transactions, it should be:

Options :

A : Secured so that reported transactions cannot be erased without senior management approval.

B : Secured by recordings that are stored for a suitable period.

C : On a number located in the office of the internal auditor.

D : On an special number known only to the chief dealer.

Answer: A

Question 3

When a broker needs to switch a name this should be done:

Options :

A : only after approval by the broker-s senior management

B : only if the switching transaction is done at the current market rate

C : only after consultation with the local regulator

D : only provided that such transactions are identified as switching transactions

Answer: D

Question 4

A dealer in the spot foreign exchange market has to assume that a price given to a voice broker is only valid:

Options :

A : until the price has been taken off' by the dealer'

B : for a short length of time, usually 30 seconds

C : for a short length of time, typically a matter of seconds

D : for a minute or two

Answer: C

Question 5

Mark-to-market' in a repo means:

Options :

A : Revaluing collateral

B : Revaluing collateral versus cash

C : Calculating the net replacement cost

D : Calculating net present value

Answer: B