What is settlement risk in FX?
A. The risk of failure of a payments or settlement system
B. The risk that only one side of an exchange of currencies will be made
C. The risk of payments `gridlock' in a real-time gross settlement system
D. The risk that default by a counterparty before the value date means you have to replace the defaulted deal at a worse rate
Taking collateral to hedge the credit risk on a counterparty means that you have:
A. Eliminated credit risk
B. Eliminated market risk
C. Taken a guarantee from the issuer of the collateral
D. Taken on market, legal and operational risks
You want to hedge your deposit against falling interest rates. Which of the alternatives below are appropriate for this purpose?
A. Selling a Money Market Future and/or selling a Forward Rate Agreement
B. Buying a Money Market Future and/or buying a Forward Rate Agreement
C. Selling a Money Market Future and/or buying a Forward Rate Agreement
D. Buying a Money Market Future and/or selling a Forward Rate Agreement
How much is one big figure worth per million of base currency if EUR/GBP is 0.8990?
A. GBP 10,000.00
B. EUR 10,000.00
C. GBP 8,990.00
D. EUR 8,990.00
A customer would hedge a currency exposure with a forward FX time option if:
A. he is unsure about the presence of a currency risk
B. the amount of the currency risk is not precisely known in advance
C. his currency risk might change over time
D. the precise maturity of the currency risk is not known
If you sell forward USD to a client against EUR, what is the first thing you should do to cover your exposure to exchange rate movements?
A. Sell and buy USD in the FX swap market
B. Sell USD in the spot market
C. Buy USD in the spot market
D. Buy and sell USD in the FX swap market
You are quoted the following market rates:
Spot EUR/USD 1.3097-00 0/N EUR/USD swap 0.08/0.11 TIN EUR/USD swap 0.29/0.34 S/N EUR/USD swap 0.10/0.13
Where can you buy EUR against USD for value tomorrow?
A. 1.299971
B. 1.309966
C. 1.309971
D. 1.310029
You are quoted the following rates:
Spot EUR/NOK7.5250-60 O/N EUR/NOK swap 3.10/3.20 T/N EUR/NOK swap 3.12/3.22 S/N EUR/NOK swap 9.35/9.55
At what rate can you sell EUR against NOK for value tomorrow?
A. 7.525322
B. 7.525312
C. 7.524688
D. 7.524678
The market is quoting: 3-month (90-day) NZD 2.55% 6-month (182-day) NZD 2.75%
What is the 3x6 rate in NZD?
A. 2.338%
B. 2.650%
C. 2.927%
D. 2.992%
You are short of 6 December EURODOLLAR futures contracts at 99.50. Yesterday, the closing price was
99.35. Today's closing price is 99.105. What variation margin will be due?
A. You will have to pay USD 5,925.00
B. You will receive USD 5,925.00
C. You will have to pay USD 3,675.00
D. You will receive USD 3,675.00
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