What is a short strangle option strategy?

A short call option + long put option with a higher strike price than the call option
A long call option + long put option with a lower strike price than the call option
A short call option + short put option with a lower strike price than the call option
A long call option + long put option with higher strike price than the call option

Answer(s): C

A euro zone-based bank that is asset-sensitive to market interest rate changes might reduce interest rate risk by:

Answer(s): B

Which of the following statements about leverage ratios under Basel III is correct?

The leverage ratio is the ratio of the bank’s Tier 1 Capital to total assets of the bank, excluding its off- balance sheet exposures and derivatives.
The purpose of introducing a leverage ratio is to avoid the build-up of excess leverage that could potentially lead to a “credit crunch” in stressed conditions.
The leverage ratio under Basel III must be higher than 4%.
The leverage ratio is the ratio of the bank’s Tier 1 and Tier 2 Capital to total assets of the bank, including its off-balance sheet exposures and derivatives.

Answer(s): B

Complete the following sentence. If a bank has an asset repricing in 6 months funded by a liability repriced in 3 months:

Answer(s): A

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