Question 1

What financial product involves exchanging a fixed interest rate for a floating interest rate?

Options :

A : A FX Swap

B : A repurchase agreement

C : An interest rate swap (IRS)

D : A dual swaption

Answer: C

Question 2

Which one of the following bonds uses variable rates?

Options :

A : bond warrants

B : reverse convertibles

C : zero coupons

D : FRN Minima's

Answer: D

Question 3

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 4

How is a call money market transaction generally confirmed?

Options :

A : by telephone between the traders

B : by a SWIFT message MT 320

C : by a SWIFT message MT 330

D : by a SWIFT message MT 300

Answer: C

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