3I0-008 Online Practice Questions and Answers

Click on the Detail Button to view the Formula Sheet. Todays date is Thursday 12th December. What is the spot value date? Assume no bank holidays.

A. 14th December

B. 15th December

C. 16th December

D. 17th December

Click on the Detail Button to view the Formula Sheet. The tom/next GC repo rate for German government bonds is quoted to you at 1.75-80%. As collateral, you sell EUR10 million nominal of the 5.25% bund July 2012, which is worth EUR 11,260,000, with no initial margin. The Repurchase Price is:

A. EUR 10,000,500.00

B. EUR 10,000,486.11

C. EUR 11,260,563.00

D. EUR 11,260,547.36

Click on the Detail Button to view the Formula Sheet. What is the Gold Offered Forward Rate?

A. The price differential between spot and forward gold prices

B. The rate at which dealers will lend gold against US dollars

C. The implied forward price of gold

D. The price of gold for forward delivery

Click on the Detail Button to view the Formula Sheet. Which of following is not true?

A. Inter-bank market participants have a duty to make absolutely clear whether the prices they are quoting are firm or merely indicative.

B. It is the duty of the dealer to periodically confirm with the broker the validity of his price.

C. It is the responsibility of the dealer to ensure that prices given to a broker are taken off if they have not been hit or were subject to a time limit.

D. No deal is done if one counterparty is unable to conclude a deal due to credit line problems and a name switch is not found within a reasonable period of time.

Click on the Detail Button to view the Formula Sheet. Today is Monday, 8th December. You sell a 9x12 FRA for value Thursday, 10th September next year. On what date is the settlement amount due to be paid or received (assuming that there are no holidays)?

A. 8th September next year

B. 10th September next year

C. 8th December next year

D. 10th December next year

Click on the Detail Button to view the Formula Sheet. You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity. 6month LIBOR for the next payment date is fixed today at 4.95%.How would you hedge the swap using FRAs? How to hedge an IRS with a strip of FRAs?

A. buy a strip of 0x6, 6x12, 12x18 and 18x24 FRAs

B. sell a strip of 0x6, 6x12, 12x18 and 18x24 FRAs

C. buy a strip of 6x12, 12x18 and 18x24 FRAs

D. sell a strip of 6x12, 12x18 and 18x24 FRAs

Click on the Detail Button to view the Formula Sheet. A 7% CD was issued recently, at par, which you now purchase at 6.75%. You would expect to pay:

A. The face value of the CD

B. More than the face value

C. Less than the face value

D. Too little information to decide

Click on the Detail Button to view the Formula Sheet. The Committee for Professionalism strongly recommends intra-day oral deal checks to help reduce the number and size of differences, particularly when dealing through voice-brokers, for deals involving foreign counterparties, in faster moving markets such as FX and when dealing in other instruments which have very short settlement periods. This checking should:

A. Be carried out at least three times a day.

B. Be agreed between the parties.

C. Be done at the end of each day.

D. Be decided by the broker.

Click on the Detail Button to view the Formula Sheet. Which of the following would not constitute an event of market disruption under the Model Code?

A. The imposition of capital controls.

B. A major terrorist attack on a financial centre.

C. The failure of SWIFT.

D. Concerted central bank intervention.

Click on the Detail Button to view the Formula Sheet. The use of off-market rates is discouraged and should be permitted only:

A. When the bank's income is secured on the trade.

B. If the unsecured credit is taken into account.

C. If the bank knows the customer very well.

D. When there are written procedures and policies for such transactions.