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

A Certificate of Deposit (CD) was issued at 2.50% which you now purchase at 1.75%. What would you expect to pay?

Options :

A : The original face value of the CD

B : More than the originally paid value

C : Less than the originally paid value

D : There is too little information to decide

Answer: B

Question 3

Under normal circumstances, which of the following is a non-negotiable instrument?

Options :

A : a Medium Term Note

B : a Bankers Acceptance

C : a Money Market Deposit

D : a Treasury Bill

Answer: C

Question 4

Which one of the following best describes the correct order of the settlements process?

Options :

A : netting, trade entry, settlement, confirmation, nostro reconciliation

B : confirmation, netting, trade entry, settlement, nostro reconciliation

C : trade entry, confirmation, netting, settlement, nostro reconciliation

D : trade entry, confirmation, settlement, nostro reconciliation, netting

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