Question 1

Which of the following is an example of a foreign currency nostro account from the perspective of a bank in London?

Options :

A : a GBP account with another UK bank

B : a CHF account with a bank in Zurich

C : a CHF account that it holds for a customer in London

D : a GBP account that it holds for a bank in New York

Answer: B

Question 2

Internationally, USD FRAs are settled with reference to which market rate?

Options :

A : LIBOR

B : FEDFUNDS

C : LIBID

D : EURIBOR

Answer: A

Question 3

The coupon of this type of bond can be based on a country`s CPI (Consumer Price Index)

Options :

A : "step up" bonds

B : index linked bonds

C : premium bonds

D : par bonds

Answer: B

Question 4

What is the rate of interest paid by the European Central Bank on cash amounts exceeding the minimum reserve requirement (excess reserves)?

Options :

A : Repo rate 1%

B : EONIA 0.25%

C : 0%

D : EONIA 1%

Answer: C

Question 5

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