Question 1

Which of the following is the best description of a broken trade”?

Options :

A : When a trade has been agreed to with dates (maturities) different from the standard dates

B : When one of the parties to the deal unilaterally decides to withdraw from the on-going transaction

C : When, due to a system break, one or both parties to the deal chooses to withdraw from the ongoing transaction

D : When, due to a system break, one or both parties to the deal are unclear as to whether the deal has been done

Answer: D

Question 2

What is an essential feature of nostro reconciliations?

Options :

A : That a daily nostro reconciliation report is sent out to the correspondent bank

B :

That they are performed before the next business day

C : That they are performed in a timely and efficient way

D : That open items are booked on an internal account

Answer: C

Question 3

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 4

Some large losses occurred in the past from derivatives trading because:

Options :

A : Derivatives brokers significantly over-charged their clients

B : Institutions did not understand the leverage of their transactions

C : Money managers engaged in intra-day trading

D : Money managers embezzled money using derivatives

Answer: B

Question 5

What is a settlement date?

Options :

A : The date by which the interest payment on an operation must be made

B : The last date by which the minimum reserve amount can be paid to the central bank

C : The date, on which settlement must be made on the contracted amount or the differential amount of an operation

D : The date a deal is processed

Answer: C

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