The forward points are calculated using:

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The forward points are calculated using:
A. The level of interest rates in the base currency
B. The level of interest rates in the quoted currency
C. The interest rates in the two currencies
D. Your expectations of the future spot rate

Answer : C


In the international market, a FRA in USD is usually settled with reference to:
A. BBA LIBOR
B. Fed funds
C. ISDALIBOR
D. EURIBOR

Answer : A



The two-week repo rate for the 5.25% Bund 2014 is quoted to you at 3.33-38%. You agree to reverse in bonds worth EUR 266,125,000.00 with no initial margin.
You would earn repo interest of:
A. EUR 349,806
B. EUR 344,632
C. EUR 319,315
D. EUR 324,110

Answer : B



The seller of a call option has:
A. Substantial opportunity for gain and limited risk of loss
B. Substantial risk of loss and substantial opportunity for gain
C. Limited risk of loss and limited opportunity for gain
D. Substantial risk of loss and limited opportunity for gain

Answer : D



Today, you sold 10 December EURODOLLAR futures contracts at 99.50. The closing price is fixed by the exchange at 99.375. What variation margin will be due?
A. You will have to pay USD 312.50
B. You will receive USD 312.50
C. You will have to pay USD 3,125.00
D. You will receive USD 3,125.00


Answer : D