Which of the following methods is a means of credit risk mitigation?
Posted: Wed Mar 16, 2022 11:10 am
Which of the following methods is a means of credit risk mitigation?
A. entering into a plain vanilla IRS
B. entering into collateral agreements
C. hedging a portfolio’s USD exposure
D. investing only in sizeable and liquid markets
Answer : B
What are the primary reasons for taking an initial margin in a classic repo?
A. Counterparty risk and operational risk
B. Counterparty risk and legal risk
C. Collateral illiquidity and counterparty risk
D. Collateral illiquidity and legal risk
Answer : C
What type of institution is the typical drawer of banker’s acceptances?
A. Credit institution
B. Investment bank
C. Corporate
D. Central Bank
Answer : A
You have quoted spot USD/CHF at 0.9423-26. Your customer says I take 5. What does he mean?
A. He buys CHF 5,000,000.00 at 0.9423
B. He buys CHF 5,000,000.00 at 0.9426
C. He buys USD 5,000,000.00 at 0.9423
D. He buys USD 5,000,000.00 at 0.9426
Answer : D
Are the forward points significantly affected by changes in the spot rate?
A. Never -
B. For very large movements and longer terms
C. Always -
D. Spot is the principal influence
Answer : B Topic 2, Volume B
A. entering into a plain vanilla IRS
B. entering into collateral agreements
C. hedging a portfolio’s USD exposure
D. investing only in sizeable and liquid markets
Answer : B
What are the primary reasons for taking an initial margin in a classic repo?
A. Counterparty risk and operational risk
B. Counterparty risk and legal risk
C. Collateral illiquidity and counterparty risk
D. Collateral illiquidity and legal risk
Answer : C
What type of institution is the typical drawer of banker’s acceptances?
A. Credit institution
B. Investment bank
C. Corporate
D. Central Bank
Answer : A
You have quoted spot USD/CHF at 0.9423-26. Your customer says I take 5. What does he mean?
A. He buys CHF 5,000,000.00 at 0.9423
B. He buys CHF 5,000,000.00 at 0.9426
C. He buys USD 5,000,000.00 at 0.9423
D. He buys USD 5,000,000.00 at 0.9426
Answer : D
Are the forward points significantly affected by changes in the spot rate?
A. Never -
B. For very large movements and longer terms
C. Always -
D. Spot is the principal influence
Answer : B Topic 2, Volume B