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Viewing page 12 out of 15 pages

Viewing questions 166-180 out of questions

Questions # 166:

After having quoted a rate of 1.5005-10, the quoting bank says, “Your risk”. This means:

Options:

The quoted rate is subject to change at the risk of the price-taker

The quoting bank is reminding you of the market risk of your potential trade

This is a requirement of any market maker

The market maker needs to check your credit limit

Expert Solution

Questions # 167:

Today, you sell GBP 5,000,000.00 to a customer against JPY for spot value. Tomorrow, the customer defaults. What is your exposure called?

Options:

Replacement risk

Settlement risk

Legal risk

Basis risk

Expert Solution

Questions # 168:

You have quoted a Swiss customer spot USD/CHF as 0.9273-78, but he asks you to quote it as CHF/USD. What do you quote?

Options:

0.9278-73

1.0784-78

1.0778-84

1,0773-78

Expert Solution

Questions # 169:

A CD can usually only be issued by what type of institution?

Options:

Credit institution

Investment bank

Discount house

Corporate

Expert Solution

Questions # 170:

What should a dealer say to express his commitment to putting an additional bid or offer at a current bid or offer price already quoted by his broker?

Options:

same way”

me too”

“par”, or “parity”

“join at”, or “support at”

Expert Solution

Questions # 171:

What do you call a combination of a long (short) call option and short (long) put option with same face value, same expiration date, same style, where the strike price is equal to the forward price?

Options:

a synthetic forward

a straddle

risk reversal

a strangle

Expert Solution

Questions # 172:

Under what conditions can an FX broker act as a position taker?

Options:

if a principal refuses to honour the deal

no conditions are required; the broker is entitled to take positions

only if he can not find another counterparty for a name switching

brokers act only as intermediaries or arrangers of deals

Expert Solution

Questions # 173:

From the following CAD rates:

1M (31-day) CAD deposit 0.95%

1x2 CAD (30-day) FRA 1.21%

2x3 CAD (31-day) FRA 2.01%

Calculate the 3-month implied cash rate.

Options:

1.42%

1.39%

2.01%

4.21%

Expert Solution

Questions # 174:

What is the ISO code for platinum?

Options:

XAU

XAG

XPT

XPD

Expert Solution

Questions # 175:

If the value of the collateral in a repo has fallen during the term of the transaction, who suffers the loss?

Options:

Seller

Buyer

Issuer

It depends on the agreement between the buyer and seller

Expert Solution

Questions # 176:

An ‘at-the-money’ call option:

Options:

Costs more than an ‘in-the-money’ call option

Costs less than an ‘out-of-the-money’ call option

Costs more than an ‘out-of-the-money’ call option

Costs the same as an ‘in-the-money’ put option

Expert Solution

Questions # 177:

Which of the following statements about Eurodollar deposits is correct?

Options:

Eurodollar deposits can only be dealt by banks in the USA

US withholding tax applies to Eurodollar deposits

Eurodollar deposits are free of US reserve requirements

Eurodollar deposits are subject to US exchange controls

Expert Solution

Questions # 178:

Forward points represent:

Options:

The expected appreciation or depreciation of the base currency

The expected appreciation or depreciation of the quoted currency

Largely, the interest rate differential between two currencies

Solely, the interest rate differential between two currencies

Expert Solution

Questions # 179:

A bank quotes a spot rate that is verifiably incorrect and deviates substantially from the prevailing market rate.

Options:

you should hit the price and hold the bank to the quoted incorrect rate, as the quoted party is entitled to hold the quoting party to an erroneous rate

you should ask the dealer to check his price, as it is highly unethical for one party to hold another to an erroneously agreed rate

you should point out the mistake and split the difference

you should keep on dealing with this bank until the mistake is rectified

Expert Solution

Questions # 180:

What criteria define a market-maker?

Options:

He will only quote to brokers

He will quote choice prices on request

He will only quote two-way prices to brokers

He will quote two-way prices for marketable amounts on request

Expert Solution

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