QUESTION: 53

Which of the following statements apply to an FX Swap?

It consists of two separate transactions, dealt with two different counterparties.
It replaces a pair of foreign exchange transactions.
It fully eliminates counterparty risk.
It reduces credit risk with the counterparty, as compared to money market deals.

Answer(s): D

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QUESTION: 54

Which interest rates are used to calculate the exchange rate of an outright transaction value tomorrow (over tom)?

The overnight interest rates of both currencies
The spot next interest rates of both currencies
The one week interest rates of both currencies
The torn next interest rates of both currencies

Answer(s): D

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QUESTION: 55

Your FX swap dealer sold and bought 2 months USD/CHF 10,000,000.00; rates were set to 0.9300 against 0.9285. What payment is your bank expecting in two months from now?

CHF 9,300,000.00
CHF 10,770,059.24
CHF 9,285,000.00
USD 10,000,000.00

Answer(s): D

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A month ago, a customer placed NZD 100,000.00 at 2.00% on a time deposit for 90 days. Today, 30 days later, he requests an anticipated close of his deposit. 2 and 3 month interbank rates are 2.10% bid and 2.20% offered. What do you do?

You agree and pay back to the customer the capital plus 2.00% interest calculated on 30 days
You agree and pay back to the customer the capital plus 2.00% interest on 30 days less your refinancing costs of 0.20% calculated on 30 days
You agree and pay back to the customer the capital plus 2.00% interest on 30 days less your refinancing costs of 0.10% calculated on 60 days
You agree and pay back to the customer the capital plus 2.00% interest on 90 days minus the actualization of this amount at 2.20% calculated over 60 days

Answer(s): D

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