Question 1

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 2

The discount or premium on forward foreign exchange points is calculated based on:

Options :

A : the level of interest rates in the base currency

B : the level of interest rates in the counter currency

C : the differential between the interest rates in the two currencies

D : the current volatility in the FX markets

Answer: C

Question 3

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 4

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 5

Which risk factors fall under counterparty risk?

Options :

A : Currency risk, interest rate risk and swap risk

B : Settlement risk, delivery risk and replacement cost

C : Operational risk

D : Settlement risk and swap risk

Answer: B

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