3I0-013 Real Exam Questions and Verified Answers

Question 1 Single choice

On the sale of a CD, the seller:

A
Receives a lower price than he originally paid
B
Receives a higher price than he originally paid
C
Receives a price calculated using the price originally paid
D
There is not enough information to know how much the seller receives

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Correct answer: B

Question 2 Single choice

The use of a bilateral netting scheme for FX settlements results in:

A
One net settlement per currency, per counterparty, per day
B
One net settlement per currency, per day
C
A single net settlement per day
D
Multiple settlements per currency, per counterparty, per day for those netted settlements

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Correct answer: B

Question 3 Single choice

What is an essential feature of nostro reconciliations?

A
That a daily nostro reconciliation report is sent out to the correspondent bank
B
That they are performed before the next business day
C
That they are performed in a timely and efficient way
D
That open items are booked on an internal account

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Correct answer: C

Question 4 Single choice

Which of the following best describes TARGET2?

A
The real-time gross settlement (RTGS) system owned and operated by the Eurosystem
B
The system used in Germany for settling high value domestic securities transactions
C
The pan-Europe netting system used for reducing credit risk for derivative transactions
D
The system used by the European Banking Federation to clear cross border Euro payments

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Correct answer: A

Question 5 Single choice

What is the replacement risk of an OTC derivative trade?

A
The risk that there is no liquid market at the exchange to close a trade
B
The risk that the present value of a trade will be negative one day prior to value date
C
The risk that an OTC-derivative product cannot be closed before maturity
D
The loss incurred if the counterparty defaults

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Correct answer: D

Question 6 Single choice

What type of documentation is recommended for repos in the international markets?

A
The SEC Emergency Short Sale Rules
B
The ISDA Master Agreement
C
The Global Master Repurchase Agreement published by the ICMA
D
An International Securities Lending Agreement

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Correct answer: C

Question 7 Single choice

If the EUR/USD is quoted to you as 1.3550-53, what does this price represent?

A
EUR per USD
B
USD per EUR
C
The interest rate differential between EUR and USD
D
The fact that one USD is worth more than one EUR

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Correct answer: C

Question 8 Single choice

What is a straddle?

A
A level of risk on derivatives
B
A type of option
C
A derivative benchmark
D
A derivative strategy using options

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Correct answer: B

Question 9 Single choice

Which action results in the highest STP-Rate?

A
The daily reconciliation of nostro accounts
B
The use of a Continuous Linked Settlement
C
The use of internal limits regulations such as counterparty limits and country limits
D
A trade confirmation check

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Correct answer: B

Question 10 Single choice

The "centralized collateral management service" offers which of the following services for its clients?

A
The valuation and transfer of collateral in general collateral (GC) repos only
B
The valuation and transfer of collateral in tri party repos only
C
The valuation and transfer of collateral in special repos only
D
The valuation and transfer of collateral in any type of repo

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Correct answer: B