Question 1

On the sale of a CD, the seller

Options :

A : receives a lower price than he originally paid

B : receives a higher price than he originally paid

C : receives a price calculated using the price originally paid

D : there is not enough information to know how much the seller receives

Answer: D

Question 2

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 3

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 4

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 5

Internationally, USD FRAs are settled with reference to which market rate?

Options :

A : LIBOR

B : FEDFUNDS

C : LIBID

D : EURIBOR

Answer: A

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