VaR increases with:

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VaR increases with:
A. lower correlation of underlying risk factors
B. a shorter time horizon
C. a lower confidence level
D. a higher confidence level

Answer : C



Which of the following correctly states the Model Codes recommendations regarding electronic trading and broking?
A. Liquidity providers should be cognizant of reputational risks when supplying liquidity for onward third party consumption.
B. Market participants must not seek information as to the legal status of a potential counterparty before allocating credit or trading status.
C. Transactions should be handled in accordance with the regulator’s dealing rule book.
D. Access to systems internally and at the client interface must be strictly controlled by the dealers.

Answer : A



Automated 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

Answer : B



Experience has shown that recourse to taped telephone conversations proves invaluable to the speedy resolution of disputes. Therefore, the Model Code recommends:
A. that all telephone conversations (internal and external) be taped without informing counterparties
B. that only conversations undertaken by dealers and brokers should be recorded
C. that all conversations undertaken by dealers and brokers should be recorded, together with back office telephone lines used by those responsible for confirming deals or passing payments to other institutions
D. that only telephone conversations between dealers and brokers be recorded

Answer : D



Spot EUR/USD is 1.3050-53 and EUR interest rates are lower than USD interest rates.
Would you expect the forward points for EUR/USD to be:
A. added to spot
B. subtracted from spot
C. a negative value
D. Insufficient information to decide


Answer : A