3I0-012

3I0-012 practice questions, page 25 of 30, with answer review and explanations.

Question 121

In the international market, a FRA in USD is usually settled with reference to:

  1. BBA LIBOR
  2. Fed funds
  3. ISDALIBOR
  4. EURIBOR

Question 122

A bank borrowing USD for 12 months and lending them for 6 months creates:

  1. Forward-forward loan
  2. Forward-forward deposit
  3. Negative gap
  4. An over-lent position

Question 123

A futures clearing house is:

  1. The buyer to each seller and the seller to each buyer
  2. A clearing agent only
  3. The self-regulatory organization for the futures exchange
  4. The owner of the futures exchange

Question 124

An Overnight Indexed Swap (OIS) is:

  1. A fixed-floating money market swap in which the floating rate is an overnight index fixed periodically over the term of the swap
  2. A fixed-floating money market swap in which the floating rate is the mean of the overnight index over the term of the swap
  3. A fixed-floating money market swap in which the floating rate is an overnight index compounded daily
  4. A floating-for-floating rate swap in different currencies in which both floating rates are overnight indexes compounded daily

Question 125

It is June. You are over-borrowed from October to January on your deposit book. How would you hedge using FRAs?

  1. Sell 3x6
  2. Buy 3x6
  3. Sell 4x7
  4. Buy 4x7