3I0-008 Online Practice Questions and Answers

Click on the Detail Button to view the Formula Sheet. If I say that I have "bought and sold" EUR/USD in an FX swap, what have I done?

A. Bought EUR and sold USD spot, and sold EUR and bought USD forward

B. Bought EUR/USD spot and sold EUR/USD forward

C. Taken a EUR loan in exchange for making a USD loan with the same counterparty

D. All of the above

Click on the Detail Button to view the Formula Sheet. If GBP/USD is 1.5350-53 and USD/JPY is 106.5053, what is GBP/JPY ?

A. 163.48-56

B. 163.51-52

C. 69.36-39

D. 69.38-39

Click on the Detail Button to view the Formula Sheet. Automatic trading systems for interbank spot FX display the best prices entered into the systems by users and:

A. Display the names of those users along their prices

B. Offer pre-trade anonymity to users quoting prices

C. Offer pre and post-trade anonymity to users quoting prices

D. Offer users the choice of whether to remain anonymous

Click on the Detail Button to view the Formula Sheet. Are the forward points materially affected by changes in the spot rate?

A. never

B. Only for very large movements and longer terms

C. always

D. spot is the principal influence

Click on the Detail Button to view the Formula Sheet. If EUR/USD is 1.1025-28 and the 6-month swap is 112.50/113, what is the 6-month outright price?

A. 1.1380-1.11405

B. 1.11375-1.1141

C. 1.09125-1.0915

D. None of these

Click on the Detail Button to view the Formula Sheet. Under which circumstances are banks allowed to park positions with a counterparty?:

A. It is forbidden to park positions.

B. In conditions of exceptional volatility.

C. If the two counterparties agree.

D. If approved by senior management.

Click on the Detail Button to view the Formula Sheet. What is the buyers primary risk in a repo?

A. The credit risk on the collateral

B. The credit risk on the repo counterparty

C. The legal risk on the contract

D. The operational risk on margin maintenance

Click on the Detail Button to view the Formula Sheet. Banks have a fiduciary responsibility to ensure that clients have all necessary information to understand the transaction because this:

A. Will encourage clients to do more business.

B. Will help prevent potential litigation.

C. Will help banks sell sophisticated risk management solutions.

D. Is required by all regulators.

Click on the Detail Button to view the Formula Sheet. Convert 8.25% quoted on a semi-annually compounded money market basis for USD to the equivalent annually-compounded bond basis.

A. 8.30%

B. 8.52%

C. 8.54%

D. 8.69%

Click on the Detail Button to view the Formula Sheet. Bank A pays for EURO 5 m at 1.1592. Bank B offers EURO 10 m at 1.1597. Broker XYZ quotes to the market EURO / USD 1.1592/97. Bank C takes the offer at 97. The broker is obliged to reveal:

A. The name of Banks A and B.

B. The name of Bank B only.

C. The amount that was bid but not the name of Bank A.

D. None of the above