QUESTION: 81 Exam Topic: 2, Volume B 100 Questions

Which one of the following four statements regarding commodity exchanges is INCORRECT?

Banks have no natural direct exposure to commodities.
Banks trade in OTC contracts primarily to serve clients and facilitate client hedging and lending.
Customers rarely trade physical commodities with banks.
Commodity markets are mot liquid than debt markets.

Answer(s): D

QUESTION: 82 Exam Topic: 2, Volume B 100 Questions

Banks duration match their assets and liabilities to manage their interest risk in their banking book. A bank has $100 million in interest rate sensitive assets and $100 million in interest rate sensitive liabilities. Currently the bank's assets have a duration of 5 and its liabilities have a duration of 2. The asset-liability management committee of the bank is in the process of duration-matching.
Which of the following actions would best match the durations?

Increase the duration of liabilities by 2 and increase the duration of assets by 1.
Increase the duration of liabilities by 2 and decrease the duration of assets by 1.
Decrease the duration of liabilities by 1 and increase the duration of assets by 1.
Decrease the duration of liabilities by 1 and decrease the duration of assets by 1.

Answer(s): B

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QUESTION: 83 Exam Topic: 2, Volume B 100 Questions

Which of the following statements is a key difference between customer loans and interbank loans?

Customers are less credit-worthy than banks on average and hence yields are higher on average for customer loans as compared to interbank loans
Customer loans are of shorter duration than interbank loans
Customer loans are easier to sell than interbank loans
Interbank loans are more customized than commercial loans

Answer(s): A

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QUESTION: 84 Exam Topic: 2, Volume B 100 Questions

Which one of the following four statements regarding floating rate bonds is incorrect?

Floating rate bonds have coupon payments tied to floating interest rates or floating interest rate indexes.
Floating rate bonds typically have less price risk than fixed rate bonds.
Floating rate bonds are very sensitive to changes in interest rates.
Floating rate bonds only have a small degree of interest rate risk.

Answer(s): C

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Free 2016-FRR Exam Braindumps (page: 46)

QUESTION: 81 Exam Topic: 2, Volume B 100 Questions

QUESTION: 82 Exam Topic: 2, Volume B 100 Questions

QUESTION: 83 Exam Topic: 2, Volume B 100 Questions

QUESTION: 84 Exam Topic: 2, Volume B 100 Questions