Which interest convention is used in the bond market for GBP?

A. ACT/360

B. ACT/ACT

C. 360/360

D. ACT/365

A 7% bond, maturing in 10 years, is selling at 92.00. What is its current yield?

A. 7.61%

B. 6.40%

C. 7%

D. the yield cannot be determined

Confirmation is a function that can be performed by:

A. any dealer as long as he/she is not a party to the trade

B. back-office staff

C. dealing room staff who is not currently dealing

D. any staff outside the dealing room

What is the advantage of instantaneous matching?

A. it gives the counterparty more time to cancel a deal

B. it reduces errors and costs

C. it gives front-office staff more time to process the payment orders

D. it increases transaction costs

A EUR based bank has a USD-convertible bond. What market risks are present?

A. interest rate and currency risks

B. interest rate, stock price and currency risks

C. stock price and currency risks

D. stock price risk

Your forward CHF dealer asks you, the junior settlements clerk, to amend revaluation rates for the forward CHF book before they are submitted to the risk management department for input. What should you do?

A. amend the rates as requested

B. refuse to amend the rates, but say nothing

C. refuse and report the incident to your superior

D. refuse and report the incident to your colleague

The process used to disguise the trail of laundered funds within the financial system is known as:

A. streamlining

B. layering

C. reinvesting

D. channeling

Your FX swap dealer bought and sold 1 month EUR/USD 25,000,000.00; rates were set to 1.2500 against 1.2520. What payment is your bank expecting in a month from now?

A. USD 31,300,000.00

B. USD 31,250,000.00

C. EUR 25,000,000.00

D. USD 19,968,051.12

The capital market is the general term for a financial market in which:

A. short-term debt, equities and securities, as well as short-term financial instruments are traded; maturities are generally less than one year

B. medium to long-term debt and financial instruments, as well as medium and long-term securities are traded until they reach maturity

C. only long-term corporate bonds, with maturities of five years or more, are bought and sold

D. only short-term financial instruments and short-term securities are traded

You bought a 6x9 EUR 8,000,000.00 FRA at 4.50%. Settlement is now due and 3 months (90 days) EURIBOR is 3.50%. What amount do you pay or receive?

A. pay EUR 20,000.00

B. receive EUR 20,000.00

C. pay EUR 19,826.52

D. receive EUR 19,826.52