Question 1

Which one of the following bonds uses variable rates?

Options :

A : bond warrants

B : reverse convertibles

C : zero coupons

D : FRN Minima's

Answer: D

Question 2

A Certificate of Deposit (CD) was issued at 2.50% which you now purchase at 1.75%. What would you expect to pay?

Options :

A : The original face value of the CD

B : More than the originally paid value

C : Less than the originally paid value

D : There is too little information to decide

Answer: B

Question 3

Internationally, USD FRAs are settled with reference to which market rate?

Options :

A : LIBOR

B : FEDFUNDS

C : LIBID

D : EURIBOR

Answer: A

Question 4

A dealer belongs to:

Options :

A : the money laundering staff

B : the middle office staff

C : the front office staff

D : the back office staff

Answer: C

Question 5

The discount or premium on forward foreign exchange points is calculated based on:

Options :

A : the level of interest rates in the base currency

B : the level of interest rates in the counter currency

C : the differential between the interest rates in the two currencies

D : the current volatility in the FX markets

Answer: C

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