Financial Markets Foundation Course v7.0

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Total 50 questions Expand All

You have just bought a USD 5,000,000 of a 3 month Commercial paper (91 days) qupted at a discount to yield of 4.5% (A/360). How much will you pay for this security?

  • A. Face value
  • B. More than face value
  • C. Less than face value
  • D. Need more information


Answer : C

A company raises money in the capital markets by issuing a bond that is offered for sale by the issuing bank. Which of the following best describes this deal?

  • A. Primary market deal
  • B. Secondary market deal
  • C. Overdraft transaction
  • D. Drawdown on a borrowing facility


Answer : A

Where is the largest centre for FX trading?

  • A. London
  • B. New York
  • C. Singapore
  • D. Hong Kong


Answer : A

The dirty price of a bond is which of the following:

  • A. The same as the clean price
  • B. Clean price + interest of the period from the last coupon payment date
  • C. Clean price + interest of the period from settlement until the next coupon payment date
  • D. Clean price + trading commissions


Answer : B

Which of the following best describes LIBOR?

  • A. The average rate at which wholesale bank deposits have taken place over the past 24 hours (since the last LIBOR fix)
  • B. The average rate at which wholesale banks are offering one another money at fixing time
  • C. The highest rate at which wholesale banks are offering one another money at fixing time
  • D. The average rate at which wholesale banks have offered money to their customers over the past 24 hours (since the last LIBOR fix)


Answer : B

CHIPS is the payment system for which currency?

  • A. GBP
  • B. USD
  • C. EURO
  • D. CHF


Answer : B

Which of the following is not a factor in determining a fair value forward fx price?

  • A. Spot rate
  • B. Interest in the base currency
  • C. Interest rate in the quoted currency
  • D. View on where rates will be at the forward date


Answer : D

The borrowings of which of the following are most likely to be driven by regulatory capital requirements?

  • A. Banks
  • B. Corporates
  • C. Governments
  • D. Supra nationals


Answer : A

The study of patterns of historic price movements to determine expected future patterns is known as:?

  • A. Technical analysis
  • B. Fundamental analysis
  • C. Value analysis
  • D. Momentum analysis


Answer : A

You hold a call option on a stock with a strike of EUR 35. The current premium for this option is EUR 3.80 and the underlying stock is trading at EUR 32. How much of this option price represents time value?

  • A. None as the option is in-the-money
  • B. EUR 3.80
  • C. EUR 3.00
  • D. EUR 0.80


Answer : B

You have sold a put on a stock at a strike of EUR 46 for a premium of EUR 2.80. What is your maximum profit on this deal?

  • A. Cannot say - it depends on market movements
  • B. EUR 46.00
  • C. EUR 43.20
  • D. EUR 2.80


Answer : D

Which of the following is not one of the so-called 3 Pillars of the European Basel regulations?

  • A. Liquidity and capital requirements
  • B. Risk management procedures
  • C. Supervisory reviews
  • D. Risk analysis and market discipline


Answer : B

A company issues a share that has a par value of 100.00 and pays a fixed dividend of
2.0% annually? What type of share is this?

  • A. Ordinary share
  • B. Cumulative share
  • C. Deferred share
  • D. Preference share


Answer : D

What sort of company is Bloomberg?

  • A. Regulator
  • B. Trade association
  • C. Data vendor
  • D. Legal firm


Answer : C

How are equity prices expressed?

  • A. As percentage of the nominal values of the share
  • B. As yields
  • C. As monetary units per share
  • D. As percentage of the value of the company


Answer : C

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