ICMA Securities Operations Foundation SOFQ Questions & Answers

• Question 1:

  The abbreviation WAC stands for:

  A. Wheel and Calculate

  B. Weighted Average Cost

  C. West Against Charge

  D. Wait About Control

  Correct Answer: B

• Question 2:

  FTM Levy is charged:

  A. On US equity trades -where the gross consideration is in excess of USD 10,000.00

  B. On UK equity trades where the gross consideration is GBP 10,000.00 and above

  C. On US equity trades where the gross consideration is USD 10,000.00 and below

  D. On UK equity trades where the gross consideration is in excess of GBP 10,000.00

  Correct Answer: D

• Question 3:

  A firm executing a securities trade in the capacity of agency broker intends:

  A. To take a securities position, and to remain market risk neutral

  B. Not to take a securities position, and not to remain market risk neutra

  C. Not to take a securities position, and to remain market risk neutral

  D. To take a securities position, and not to remain market risk neutral

  Correct Answer: A

• Question 4:

  Internal trading systems typically do not:

  A. Reflect the firm's settled positions at CSDs/custodians

  B. Have the capability to capture new trades

  C. Hold the firm's current trading positions

  D. Have the capability to amend and cancel trades

  Correct Answer: A

• Question 5:

  The 'settlement cycle' within a securities market refers to the number of days:

  A. Between a trade's trade date and the actual settlement date of a trade

  B. Between a security's issue date and the value date of a trade

  C. Between a trade's trade date and its value date

  D. Between the trade date of a trade and the issue date of a security

  Correct Answer: C

• Question 6:

  The International Monetary Fund is an example of:

  A. A supranational organisation

  B. A sovereign wealth fund

  C. An investment bank

  D. A securities market regulator

  Correct Answer: A

• Question 7:

  'ISO' stands for:

  A. Invention of Standards for Organisations

  B. Intercontinental Symposium of Organisations

  C. International Organisation for Standardisation

  D. Intraterritorial Organisation of Securities

  Correct Answer: C

• Question 8:

  Accrued interest is designed to:

  A. Compensate the buyer of an interest-bearing bond for interest earned, (but not paid) since the previous coupon payment date

  B. Compensate the seller of an interest-bearing bond for interest earner, (but not paid) relating to the next coupon payment date

  C. Compensate the buyer of an interest-bearing bond for interest earned, (but not paid) relating to the next coupon payment date

  D. Compensate the seller of an interest-bearing bond for interest earned, (but not paid) since the previous coupon payment date

  Correct Answer: D

• Question 9:

  A bond which pays no interest during its lifetime sand repays capital on its maturity date is known as:

  A. A zero interest bond

  B. A nil interest bond

  C. A zero coupon bond

  D. A zero interest note

  Correct Answer: C

• Question 10:

  A 'put' option on a bond allows:

  A. The stock exchange to force the bondholder to redeem the bonds prior to the bond's scheduled maturity date

  B. The regulator to force the issuer to redeem the bonds prior to the bond's scheduled maturity date

  C. The bondholder to redeem their bonds prior to the bond's scheduled maturity date

  D. The bond issuer to force redemption of bonds prior to the bond's scheduled maturity date

  Correct Answer: C