3I0-012 Online Practice Questions and Answers

Under Basel rules, what is the meaning of EEPE?

A. Effective Expected Potential Exposure

B. Effective Expected Positive Exposure

C. Effective Expected Price Earning

D. Effective Expected Payment Exposure

Which is the day count/annual basis convention for SGD money market deposits?

A. ACT/365

B. ACT/360

C. ACT/ACT

D. 30E/360

Which one of the following bullion coins has a 999.9/1000 gold purity (.9999 fineness)?

A. the Canadian "Maple Leaf"

B. the South African "Krugerand"

C. the American "Gold Eagle"

D. the United Kingdom "Sovereign"

An FRA is:

A. A cash instrument

B. An exchange traded derivative

C. An interest rate derivative

D. A balance sheet instrument

You have prepared the following economic capital table for the next ALCO meeting: For which of the following risks should you consider actions?

A. credit risk

B. interest rate risk

C. liquidity risk

D. currency risk

Which one of the following statements concerning covenants is incorrect?

A. Covenants are clauses in bank credit agreements and bond indentures designed to assure debt holders that the creditworthiness of the borrower(s)/issuer(s) will remain satisfactory

B. Covenants must be tailored to reflect the specific needs of the borrower/issuer and the specific risks perceived by the debt holders.

C. Covenants require the holder of the debt to refrain from doing certain specific things.

D. Three different types of covenants in credit agreements and bond indentures are affirmative, negative and financial.

You quote the following rates to a customer spot GBP/CHF 2.2005-10 3M GBP/CHF swap 120/115 At what rate do you sell GBP to a customer 3-month outright?

A. 2.1890

B. 2.2125

C. 2.1895

D. 2.1885

The premium on an option contract is:

A. The price of the underlying commodity at the time of the transaction

B. The price at which the transaction on the underlying commodity will be carried out if and when the option is exercised

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

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

A customer sells a LIFFE Euro Swiss futures contract. Which of the following risks could he be trying to hedge?

A. An increase in forward USD/CHF

B. Falling CHF interest rates

C. A decrease in forward USD/CHF

D. Rising CHF interest rates

Purchasing a USD/JPY call option is equivalent to:

A. Selling an JPY/USD put option

B. Selling a JPY/USD call option

C. Purchasing an JPY/USD put option

D. None of the above