Question 1

What is a long strangle option strategy?

Options :

A : A long call option + short put option with higher strike price than the call option

B : A long call option + long put option with a lower strike price than the call option

C : A short call option + short put option with a higher strike price than the call option

D : A short call option + short put option with a lower strike price than the call option

Answer: B

Question 2

What does the Model Code say concerning repos and stock-lending?

Options :

A : The exact maturity (end) dates for transactions must be agreed as soon as possible after a transaction.

B : All market participants should use the Modified Following Business Day Convention.

C : Legal documentation must be put in place as soon as possible after transaction.

D : All market participants should use the Modified Previous Business Day Convention.

Answer: B

Question 3

3-month USD/CHF is quoted at 12/10. Interest rates in Switzerland are reduced but USD rates (which are higher) are unchanged. What would you expect the 3-month forward USD/CHF rate to be?

Options :

A : unchanged

B : 10/8

C : 15/13

D : 6/4

Answer: C

Question 4

If GBP/USD is 1.5350-53 and USD/JPY is 97.50-53, what is GBP/JPY?

Options :

A : 63.52-53

B : 149.66-74

C : 63.51-54

D : 149.69-71

Answer: B

Question 5

What is the minimum basis on which a BCP should be updated and tested?

Options :

A : Whenever the BCP procedures are changed

B : Every 3 months

C : Every 6 months

D : Yearly

Answer: D

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