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Questions # 1:

Brokers shall not reveal the identity of a counterparty unless:

Options:
A.

They are forced to do so.

B.

Explicitly authorised to do so by the counterparty.

C.

They know the counterparty very well.

D.

They are asked by their senior management to do so.

Questions # 2:

You deal over the phone with a counterparty. The subsequent confirmation differs from the terms agreed verbally. What is the result?

Options:
A.

The confirmation takes precedence as it is a written contract.

B.

The matter will have to be submitted to arbitration in order to establish the mutual intent of the parties.

C.

It depends on local law.

D.

The verbal agreement is binding.

Questions # 3:

Which of following is not true?

Options:
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.

Questions # 4:

Confirmations must be sent out

Options:
A.

Immediately after the deal is done.

B.

As quickly as possible after the deal is done.

C.

By electronic media only, e.g. fax, telex.

D.

Not later than the value date of the first leg of the transaction.

Questions # 5:

To curb attempted fraud, banks should:

Options:
A.

Require greater vigilance by the management and staff.

B.

Take particular care when the beneficiary is a third party to the deal.

C.

Ensure that details of all telephone deals which do not include pre-agreed standard settlement instructions are confirmed by telex or similar means without delay.

D.

All of the above.

Questions # 6:

Click on the Exhibit Button to view the Formula Sheet. Bank A pays for EURO 5 m at 1.1592. Bank B offers EURO 10 m at 1.1597. Broker XYZ quotes to the market EURO /USD 1.1592/97. Bank C takes the offer at 97. The broker is obliged to reveal:

Options:
A.

The name of Banks A and B.

B.

The name of Bank B only.

C.

The amount that was bid but not the name of Bank A.

D.

None of the above

Questions # 7:

Voice-brokers in spot FX are remunerated with:

Options:
A.

Commission paid by both parties at rates agreed beforehand

B.

A fee paid by the seller

C.

Bid/offer spread

D.

A share of the bid/offer spread

Questions # 8:

When you are accepting a stop loss order, you must:

Options:
A.

Ensure that your counterparty understands the terms under which your bank accepts the order.

B.

Ensure that your counterpart can be contacted in the event of unusual situations or events or extremely volatile market conditions.

C.

Ensure that your counterparty understands that any guarantee or fixed price execution requires agreement in writing.

D.

All of the above.

Questions # 9:

When a stop-loss/profit order is taken, the rate specified in the order:

Options:
A.

must be transacted regardless of where the market moved

B.

must be transacted if a broker confirms that the specified rate was reached

C.

cannot be taken as a fixed-price guarantee unless agreed in writing

D.

will always be the stop loss rate, if the order is executed

Questions # 10:

Which of the following cannot produce a capital gain?

Options:
A.

Treasury bill

B.

CD

C.

ECP

D.

Classic repo

Questions # 11:

Click on the Exhibit Button to view the Formula Sheet, If GBP/USD is 1.5350-53 and USD/JPY is 106.50-53, what is GBP/JPY?

Options:
A.

163.48-56

B.

163.51-52

C.

69.36-39

D.

69.36-39

Questions # 12:

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, provided the amounts are marketable.

C.

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

D.

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

Questions # 13:

It is now permissible in most markets for brokers to be owned by banks and other principals. Where there is shared management, or a share holding or other investment in a broker by a counterparty:

Options:
A.

The broker is not obligated to reveal the connection provided Chinese Walls are in place.

B.

The broker is not obligated to reveal the connection in the professional market.

C.

The broker should advise the other counterparty of the connection.

D.

The matter is covered in the Model Code.

Questions # 14:

What is the day count/annual basis convention for euroyen deposits?

Options:
A.

Actual/365

B.

Actual/360

C.

Actual/actual

D.

30E/360

Questions # 15:

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

Options:
A.

the fixing spot rate

B.

the daily high

C.

the days’ average rate

D.

the average rate over the NDF period

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