Which of the following will tend to have the higher yield?
A. Treasury bill
B. Repo against Treasury bill collateral
C. They have the same yield
D. Cannot say
Mark-to-market' in a repo means:
A. Revaluing collateral versus cash
B. Revaluing collateral
C. Calculating net present value
D. Calculating the net replacement cost
How can material divergences between the value of cash and collateral be managed in a documented sell/ buy-back?
A. Margin maintenance
B. Re-pricing
C. Margin maintenance or re-pricing, but usually margin maintenance
D. Margin maintenance or re-pricing, but usually re-pricing
The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75- 80%. As collateral, you are offered EUR 25,000,000.00 nominal of the 5.5% OAT April 2015, which is worth EUR 28,137,500.00. If you impose an initial margin of 1%, the Repurchase Price is:
A. EUR 27,947,276.43
B. EUR 27,946,077.08
C. EUR 27,950,071.43
D. EUR 27,948,871.97
Four banks provide you with quotes in CHF/SEK. Which is the best price for you to buy SEK?
A. 6.5825
B. 6.5820
C. 6.5815
D. 6.5830
After having quoted a rate of 1.5005-10, the quoting bank says, "Your risk". This means:
A. The quoted rate is subject to change at the risk of the price-taker
B. The quoting bank is reminding you of the market risk of your potential trade
C. This is a requirement of any market maker
D. The market maker needs to check your credit limit
What is the London Gold Price Fix (London Gold Fixing)?
A. the gold price fixed twice a day to balance supply and demand in the London bullion market
B. the gold price fixed at the end of the day in the London bullion market
C. the gold price fixed at 11:00 am. local time in the London bullion market from a panel of gold traders
D. the gold price fixed at 11:00 a.m. to settle gold contracts in the London bullion market
The outright forward FX rate is not a function of which of the following?
A. The interest rates of the two currencies
B. The spot exchange rate
C. Thedaycount
D. Market expectation
The Interest Rate Parity Theorem states that:
A. Interest rates in different currencies will tend to move into line with each other over time
B. Interest rates in different currencies differ due to differences in expectations about inflation
C. Selling a low interest rate currency to invest a high interest rate currency will only be profitable if one hedges the currency risk
D. Selling a low interest rate currency to invest in a high interest rate currency should not be profitable if one hedges the currency risk
Forward points represent:
A. The expected appreciation or depreciation of the base currency
B. The expected appreciation or depreciation of the quoted currency
C. Largely, the interest rate differential between two currencies
D. Solely, the interest rate differential between two currencies
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