The seller of a put option has:

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The seller of a put 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


You are quoted the following market rates:
spot USD/SEK 6.3850
1M (30-day) USD 0.40%
1M (30-day) SEK 1.15%
What is 1-month USD/SEK?
A. 6.4250
B. 6.3810
C. 6.7850
D. 6.3890

Answer : D



Which of the following statements is correct?
A. Unilateral collateral obligations to sovereign counterparties provide liquidity to banks.
B. Under Basel III commercial banks are most likely to incur lower costs to service their sovereign clients.
C. While banks usually do not call for collateral from sovereign counterparties, they must provide collateral for the offsetting hedge transactions which are undertaken with commercial counterparties.
D. Uncollateralised exposures to sovereign counterparties will not require additional regulatory capital to be set aside against potential credit losses

Answer : C



If a dealer has a 6-month USD asset and a 3-month USD liability, how could he hedge his balance sheet exposure in the FRA market?
A. Buy 3x6
B. Sell 3x6
C. Buy 0x6
D. Sell 6x9

Answer : A



Responsibility for the activities of all personnel engaged in dealing (both dealers and support staff) for both principals and brokers lies with:
A. the market supervisor
B. the national ACI association
C. the management of such organizations
D. the central bank


Answer : C