Question 1

EURIBOR, the Euro Interbank Offered Rate is:

Options :

A : the rate at which Euro interbank term deposits are offered by one prime bank to another prime bank published at 11.00 a.m. CET

B : the interest reference rate for the Euro calculated daily from the rates of 16 London banks

C : the interest reference rate for all major currencies calculated daily from the rates of panel banks from EU countries

D : the rate at which Euro interbank term deposits are offered by prime banks to corporate published at 11.00 a.m. CET

Answer: A

Question 2

Herstatt Risk is also known as:

Options :

A : settlement risk

B : translation risk

C : replacement risk

D : operational risk

Answer: A

Question 3

The control failings involving Barings and Daiwa highlight the critical importance of what operational risk management practice?

Options :

A : the taping of conversations between counterparties

B : model signing-off and implementation controls

C : the separation between front/back office duties

D : the existence of contingency plans

Answer: C

Question 4

The organization “SWIFT” belongs to:

Options :

A : The members of the system (member-owned cooperative)

B : The European Banking Federation based in Brussels

C : The European Central Bank

D : The IMF

Answer: A

Question 5

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

Options :

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

Answer: C