3I0-008 Online Practice Questions and Answers

Click on the Detail Button to view the Formula Sheet. Which of the following are transferable instruments?

A. Eurocertificate of deposit

B. US Treasury bill

C. CP

D. All of the above

Click on the Detail Button to view the Formula Sheet. What are the secondary market proceeds of a CD with a face value of EUR 5 million and a coupon of 3% that was issued at par for 182 days and is now trading at 3% but with only 7 days remaining to maturity?

A. EUR 4,997,085.03

B. EUR 5,000,000.00

C. EUR 5,071,086.45

D. EUR 5,072,874.16

Click on the Detail Button to view the Formula Sheet. A CD with a face value of USD50 million and a coupon of 4.50% was issued at par for 90 days and is now trading at 4.50% with 30 days remaining to maturity. What has been the capital gain or loss since issue?

A. +USD 373,599.00

B. +USD 186,099.00

C. -USD 1,400.99

D. Nil

Click on the Detail Button to view the Formula Sheet. Which of the following statements is correct?

A. An adjusted settlement amount is paid at the end of the FRA contract period that includes reinvestment interest for late payment

B. An unadjusted settlement amount is paid at the end of the FRA contract period

C. An adjusted settlement amount is paid at the start of the FRA contract period that is discounted for early payment

D. An unadjusted settlement amount is paid at the start of the FRA contract period

Click on the Detail Button to view the Formula Sheet. An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:

A. European-style option

B. American-style option

C. Bermudan option

D. Asian option

Click on the Detail Button to view the Formula Sheet. You are quoting forward FX prices to a broker subject to finding a counterparty for a matching transaction. The Model Code says:

A. You must tell the broker, who must qualify your quotes.

B. For credit reasons, you must tell the broker when he presents a name.

C. You cannot do this.

D. The Model Code does not make recommendations on this subject.

Click on the Detail Button to view the Formula Sheet. You bought USD 5,000,000 against EUR at 1.1037 and 3,000,000 at 1.1052. If the EUR/USD rate is now quoted 1.1015/17, and if you deal at that rate, what profit would you make?

A. Nil

B. A profit of EUR 16,847.58

C. A loss

D. A profit of EUR 18,166.05

Click on the Detail Button to view the Formula Sheet. Gambling or betting amongst market participants has obvious dangers and:

A. Should be forbidden.

B. Should be strongly discouraged.

C. Should be monitored by management.

D. All of the above.

Click on the Detail Button to view the Formula Sheet. A broker offers a dealer an incentive in the form of a reduction to the agreed schedule of brokerage between the firms.

A. This is a normal volume discount.

B. The offer requires approval in writing by both senior managements.

C. The offer requires agreement in writing between the broker and the dealer.

D. This is illegal.

Click on the Detail Button to view the Formula Sheet. Todays date is Thursday 12th December. What is the spot value date? Assume no bank holidays.

A. 14th December

B. 15th December

C. 16th December

D. 17th December

Click on the Detail Button to view the Formula Sheet. If 6-month EUR/AUD is quoted at 29/32, which of the following statements is correct?

A. EUR rates are higher than AUD rates in the 6-month

B. AUD rates are higher than EUR rates in the 6-month

C. There is a positive EUR yield curve

D. There is not enough information to decide

Click on the Detail Button to view the Formula Sheet. Banks have a fiduciary responsibility to ensure that clients have all necessary information to understand the transaction because this:

A. Will encourage clients to do more business.

B. Will help prevent potential litigation.

C. Will help banks sell sophisticated risk management solutions.

D. Is required by all regulators.

Click on the Detail Button to view the Formula Sheet. Which of the following would not constitute an event of market disruption under the Model Code?

A. The imposition of capital controls.

B. A major terrorist attack on a financial centre.

C. The failure of SWIFT.

D. Concerted central bank intervention.

Click on the Detail Button to view the Formula Sheet. Which of the following is true?

A. The Euronext.LIFFE short sterling futures contract has a tick value of GBP 12.50 and a face value of GBP 1,000,000

B. The Euronext.LIFFE JPY futures contract has a tick value of JPY 2,500 and a face value of JPY 1,000,000,000

C. The CME eurodollar futures contract has a minimum price interval of one-quarter tick (0.0025) for the nearest contract

D. All of the above

Click on the Detail Button to view the Formula Sheet. Under the Model Code, if a broker shouts "done" or "mine" at the very moment a dealer shouts "off":

A. No deal is done

B. The deal is done.

C. It should be resolved in consultation with senior management.

D. The central bank should be consulted.