Question 1

What is the meaning of CCP within the Basel framework?

Options :

A : Collateralized Clearing Process

B : Collateralized Counterparty Protection

C : Central Clearing Counterparty

D : Collateralized Credit Protection

Answer: C

Question 2

Brokers should confirm all transactions:

Options :

A : Only if the transaction is not for a marketable amount.

B : To both counterparties immediately by fax or other acceptable electronic means.

C : Only if the deal is between overseas counterparties and for value today.

D : Initially by fax or other acceptable electronic means, then in writing.

Answer: B

Question 3

You quote a price to a broker on EUR 100 million. Your price is hit for EUR 50 million. What does the Model Code say about this situation?

Options :

A : You have a right to qualify your quotes in terms of amounts, if you do so when you make the price.

B : You have a right to qualify your quotes in terms of amounts, once you have discovered the name of the counterparty for credit reasons.

C : You have a right to qualify your quotes in terms of amounts.

D : You have a right to qualify your quotes in terms of amounts, provided the amounts are marketable.

Answer: A

Question 4

What is the correct interpretation of a EUR 5,000,000.00 one-week VaR figure with a 99% confidence level?

Options :

A : A loss of at most EUR 5,000,000.00 can be expected in 1 out of the next 100 days.

B : A loss of at least EUR 5,000,000.00 can be expected in 99 out of the next 100 weeks.

C : A loss of at most EUR 5,000,000.00 can be expected in 1 out of the next 100 weeks.

D : A loss of at least EUR 5,000,000.00 can be expected in 1 out of the next 100 weeks.

Answer: D

Question 5

On fixing date, the settlement payment of an NDF reflects the differential between the agreed forward rate and:

Options :

A : the daily high

B : the days' average rate

C : the fixing spot rate

D : the average rate over the NDF period

Answer: C

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