3I0-010 Online Practice Questions and Answers

What is a nostro bank account?

A. an account held with another bank

B. an account another bank holds with you

C. a trust account

D. a suspense account

How is the price of an interest rate swap (IRS) expressed?

A. as an exchange rate

B. as a cash flow

C. as a margin added to the floating rate

D. as an interest rate expressed in percentage terms

On 15 April 2010 you buy a bond whose coupon falls on 15 January 2010. The interest basis is 30/360. Using bond settlement T+1, how many days do you apply for the interest calculation?

A. 89 days

B. 90 days

C. 91 days

D. 92 days

Which SWIFT message type is a nostro cash reconciliation software package based on?

A. SWIFT message type 300

B. SWIFT message type 292

C. SWIFT message type 571 (i.e. a statement of holdings)

D. SWIFT message types 940 and 950 (i.e. a statement of account)

The use of a net open positions report:

A. can be used to show the counterparty the amounts it has to pay

B. can be used as the basis of reporting the banks position to the relevant central bank of the country concerned, against the limit granted for the bank

C. can be used as the basis of reporting the banks position to the relevant tax regulations office of the country concerned

D. can be used to adjust the country limits

To ensure effective risk management within a large financial institution, the head of risk management should report to:

A. the head of trading

B. the head of IT

C. the board of directors (top management)

D. one cannot say, it depends on the financial institution

What are the three successive stages of money laundering?:

A. integration, layering, placement

B. integration, placement, layering

C. placement, layering, integration

D. layering, integration, placement

Minimum reserves at the European Central Bank are:

A. not remunerated

B. remunerated at the marginal lending facility rate minus 2%

C. remunerated at the rate of the deposit facility

D. remunerated at the main refinancing rate

The exercise price (strike price) of an option contract is:

A. the price of the underlying instrument at the time of the transaction

B. the price at which the transaction on the underlying instrument will be carried out if the option is exercised

C. the price the buyer of the option pays to the seller when entering into the options trade

D. the price at which the two counterparties can close out their position

Settlement prices on futures contracts are

A. official prices calculated by the exchange at the close of trading for the purpose of making margin calculations

B. official prices calculated by a panel of central banks

C. official prices calculated by the central bank where the stock exchange is located

D. never used