Which of the following situations would be most likely to result in a negative mark-to-market for a bank borrowing short term and lending long term?

Answer(s): C

The primary issue for insuring prudent liquidity management in accord with the guidance provided by the Basel Committee (Basel II I Basel III) is:

Answer(s): B

Which of the following statements about Credit Default Swaps (CDS) is correct?

CDS are used to recover funds from defaulted swap counterparties.
CDS provide protection against specified credit events to the party receiving the CDS premium payments.
CDS provide protection against the default of the trade counterparty that buys the CDS.
CDS provide compensation to the protection buyer, should a specified credit event occur to a third party entity.

Answer(s): D

Which of the following is not the responsibility of the asset and liability committee (ALCO)?

ensure that compliance is carried out efficiently
set limits on borrowing in the short-term markets to fund long-term lending
develop, evaluate, monitor and approve strategies related to risk due to imbalances in the asset and liability structure of the balance sheet
report to the board of directors

Answer(s): C

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