ICMA fmfc practice test

Financial Markets Foundation Course Exam


Question 1

Which of the following currencies uses an Act/365 day-count in its money market transactions?

  • A. UDS
  • B. JPY
  • C. EUR
  • D. GBP
Answer:

D

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Question 2

Approximately what is the daily turnover in the global fx markets (in USD equivalent)?

  • A. USD 5 billion per day
  • B. USD 500 billion per day
  • C. USD 5 trillion per day
  • D. USD 50 trillion per day
Answer:

C

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Question 3

What type of bond is a "Yankee" bond?

  • A. Government bond
  • B. Eurobond
  • C. Domestic foreign bond
  • D. Global bond
Answer:

C

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Question 4

You hold a call option on a stock with a strike of EUR 35. The current premium for this option is EUR
3.80 and the underlying stock is trading at EUR 32. How much of this option price represents time
value?

  • A. None as the option is in-the-money
  • B. EUR 3.80
  • C. EUR 3.00
  • D. EUR 0.80
Answer:

B

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Question 5

What is the credit spread on a corporate bond?

  • A. The increased size of the bid/ask spread in a trade price
  • B. The difference in price between a corporate bond and a benchmark treasury
  • C. The additional yield required by investors to offset the credit risk of the security
  • D. The difference between the coupon rate of a corporate bond and the dividend of the issuing company
Answer:

C

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Question 6

Which of the following would not be expected to execute market deals?

  • A. Salesperson
  • B. Trader
  • C. Operations manager
  • D. Fund manager
Answer:

C

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Question 7

What sort of company is Bloomberg?

  • A. Regulator
  • B. Trade association
  • C. Data vendor
  • D. Legal firm
Answer:

C

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Question 8

Which of the following is not a factor in determining a fair value forward fx price?

  • A. Spot rate
  • B. Interest in the base currency
  • C. Interest rate in the quoted currency
  • D. View on where rates will be at the forward date
Answer:

D

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Question 9

Which of the following is NOT a vlue-weighted index?

  • A. S&P 500
  • B. FTSE10C0
  • C. CAC40
  • D. DJIA
Answer:

D

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Question 10

Which of the following would be considered a consumption asset?

  • A. Land
  • B. Buildings
  • C. Heavy equipment
  • D. Food and drink
Answer:

D

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