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Questions # 1:

What happens if an instruction remains unmatched and/or unsettled through CLS Bank?

Options:
A.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis.

B.

If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis.

C.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis.

D.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades.

Questions # 2:

Which one of the following statements about "CLS rescinds" is correct?

Options:
A.

CLS settlement members may rescind instructions unilaterally provided that the rescind messages reach the CLS Bank before the 00:00 CET deadline.

B.

CLS settlement members may rescind instructions unilaterally provided that the rescind messages reach the CLS Bank before the 06:30 CET deadline.

C.

CLS settlement members may rescind instructions bilaterally only if the rescind messages reach the CLS Bank before the 00:00 CET deadline.

D.

CLS settlement members may rescind instructions bilaterally only if the rescind messages reach the CLS Bank after the 06:30 CET deadline.

Questions # 3:

AFRA is:

Options:
A.

An instrument for managing interest rate risk

B.

An instrument for managing credit rate risk

C.

An instrument that never impacts P/L

D.

The forward leg of an FX swap

Questions # 4:

A non deliverable forward (NDF) is a:

Options:
A.

Cash-settled currency forward between two counterparties

B.

Exchange-traded, cash-settled currency forward

C.

Over-the-counter, cash-settled spot FX

D.

Principal-settled currency forward between two counterparties

Questions # 5:

When is the final cut-off time for settlement payment orders using the Fedwire Funds Service?

Options:
A.

17:30 (5:30 p.m.) Eastern Time (ET)

B.

18:00 (6:00 p.m.) Eastern Time (ET)

C.

18:30 (6:30 p.m.) Eastern Time (ET)

D.

19:00 (7:00 p.m.) Eastern Time (ET)

Questions # 6:

When a deal is done via a broker:

Options:
A.

It need not be confirmed between the counterparties as the broker confirms it immediately with both counterparties

B.

It should also be confirmed directly between the two counterparties

C.

It is important to note that broker confirmations are bilateral confirmations between the principals of the trade

D.

The dealer should obtain acknowledgement that the deal has been agreed to but may assume agreement to the trade in the absence of such acknowledgement

Questions # 7:

In using futures contracts there is:

Options:
A.

Only market risk

B.

Only credit risk

C.

Market risk and credit risk

D.

Market risk, credit risk and delivery risk

Questions # 8:

Which of the following statements best describes an asset swap?

Options:
A.

A combination of a fixed rate bond and a fixed/floating interest rate swap

B.

An option on fixed/floating interest rate swap

C.

The sale of a bond against cash with a simultaneous agreement to buy the bond at an agreed upon rate and date

D.

The sale of a fixed rate bond against the simultaneous purchase of a floating rate note

Questions # 9:

In error, your dealer enters a trade whereby he buys GBP 8,000,000.00 against USD at 1.5500, but manages to cover it at the same rate. When the initial mistaken trade is cancelled, however, the rate has since changed to 1.5200. What is the effect on P&L?

Options:
A.

Profit GBP 240,000.00

B.

Loss GBP 240,000.00

C.

Profit USD 240,000.00

D.

Loss USD 240,000.00

Questions # 10:

In the US commercial paper market, commercial paper is limited to:

Options:
A.

a 270-day tenor

B.

a 360-day tenor

C.

a 365-day tenor

D.

a 366-day tenor

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