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Free 3I0-012 Exam Braindumps (page: 52)

Page 51 of 186
PDF with 740 Questions

Which of the following statements is correct regarding duration?

  1. It is a measure of the average price of a financial instrument.
  2. It doesn’t take into account the timing and market value of cash flows.
  3. It increases if the average coupon increases.
  4. It decreases as maturity decreases

Answer(s): D



Using reprising gap analysis, a bank’s balance sheet is considered liability-sensitive to market interest rate changes, if:

  1. more liabilities than assets will be reprised in the near term
  2. more assets than liabilities will be reprised in the near term
  3. more assets than liabilities have variable rates or short residual maturities
  4. non-interest bearing liabilities are greater than non-interest bearing assets

Answer(s): A



Which of the following statements about the Liquidity Coverage Ratio is correct?

  1. The LCR is a measure to ensure that the reserve of high quality liquid assets is sufficient to cover short term demand for liquidity in a stress situation.
  2. the ratio (cash outflow in a 30-day stress period divided by high quality liquid assets) has to be greater than 100%.
  3. Covered bonds are class 1 assets.
  4. Obligations issued by central banks or government agencies are class 2 assets.

Answer(s): A



Which one of the following statements about mark-to-model valuation is correct?

  1. Mark-to-model valuation is used for exchange-traded positions to ensure correct pricing.
  2. Asset managers are not allowed to use mark-to-model valuation.
  3. Mark-to-model valuation is used for complex financial instruments; it is always accurate and in line with potential tradable prices.
  4. Mark-to-model valuation refers to prices determined by financial models, rather than actual market prices.

Answer(s): D






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