A corporate wishing to hedge the interest rate risk on its floating-rate borrowing would:

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A corporate wishing to hedge the interest rate risk on its floating-rate borrowing would:
A. Sell interest rate caps
B. Sell futures
C. Sell FRAs
D. Buy futures

Answer : B



The use of standard settlement instructions (SSI’s) is strongly encouraged because:
A. it reduces operational risk
B. it splits differences arising from failed settlement between the two counterparties
C. it removes the need for sending out SWIFT confirmations
D. the use of SSI’s secures the trading on more secure platforms

Answer : A



What is the correct interpretation of a EUR 2,000,000.00 overnight VaR figure with a 97% confidence level?
A. A loss of at least EUR 2,000,000.00 can be expected in 97 out of the next 100 days.
B. A loss of at most EUR 2,000,000.00 can be expected in 3 out of the next 100 days.
C. A loss of at least EUR 2,000,000.00 can be expected in 3 out of the next 100 days.
D. A loss of at most EUR 2,000,000.00 can be expected in 6 out of the next 100 days.

Answer : C



Which one of the following statements is true?
A. Brokers should only show the names of banks to counterparties who have prime credit ratings.
B. Brokers should only show the names of banks to counterparties who provide good liquidity to the brokered market.
C. Brokers should only show the names of banks to counterparties whom they know well.
D. Brokers should only show the names of bank counterparties if both sides display a serious intention to transact

Answer : D



Which of the following currencies is quoted on an ACT/360 basis in the money market?
A. SGD
B. PLN
C. GBP
D. NZD


Answer : D