Money Market Review

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1. A fixed deposit is a deposit placed for a fixed period at a fixed rate of interest.
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2. A _______ deposit is a deposit placed  for a fixed period at a fixed rate of interest.
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3. What is the interest rate to pay for GBP 1-M for 1 year at 6%? (write it in whole no)
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4. Fill in the blank: When currency is GBP, the formula for computation of interest rate is : Principal x Rate x (no of days /  ______ )
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5. Can Central Banks directly lend to commercial banks?
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6. O/N is the term for a transaction where the first value date is today and the maturity date is the next business day.
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7. When a country is performing well and market participants feel that this performance will at least be sustained in the future, the demand for funds will tend to ___________ .
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8. An example of market participant rate is the deposit rate for borrowing and lending.
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9. The origins of Bills of Exchange can be tracked back to at least the 4th century BC.
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10. The primary purpose of Central banks in lending to commercial banks is to ensure the banks have enough liquidity to meet demand.
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11. Prime rate refers to a short-term interest rate that banks charge to their most creditworthy customers.

Explanation

The prime rate is a short-term interest rate that banks charge to their most creditworthy customers. It is also known as the base rate.

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12. In a special repo, 'special' refers to the:
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13. To close out a short position in a particular security, a dealer would use:

Explanation

Dealers use reverse repos to close out short positions in a particular security. In this situation, they purchase securities with a simultaneous agreement to sell them back at some date in the future.The increasing use of short selling has provided the opportunity for many institutions (such as insurance companies and pension funds) to increase their portfolio returns by lending their securities to dealers in the repo market.

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14. Today is June 6. The repo dealer at DEF Bank has been asked to do some funding for the bank. The dealer needs to raise about USD 50 million and has been asked to see what rates can be achieved. As DEF Bank is only looking for liquid money, the dealer is looking at the rates for one-day and open repos. The rates quoted on the screen are: USD 3.10 - 3.15 If the dealer at DEF wants to raise money, which rate will be used? Input your answer correct to two decimal places.  

Explanation

The answer is 3.15. The market is offering to lend money, against collateral, at 3.15% and is looking to pay 3.10% for deposits.

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15. When the dealer looks at the bank's available collateral, he discovers that the bank does not have USD 50 million of US securities on its books to use as collateral.  Instead it has the following: USD 30 million US Treasuries 4.5% 11 November 20x6 trading at 100.50 (clean price) EUR 10 million German Bunds 5% 30 April 20X3 trading at 99.89 (clean price) EUR 15 million French OATs 4.75% 31 May 20X6 trading at 99.45 (clean price) What sort of repo structure will enable the bank to use the euro collateral to raise USD? 

Explanation

Cross currency repos have an exchange rate aspect as an additional complication. In practice, its impact on calculation is relatively limited.

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16. What do you think is the most common maturity for repurchase agreements? 

Explanation

The most common maturity for repurchase agreements is one day.

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17. If a security goes on special, the repo rate applied to this particular security will be 

Explanation

The repo rate is paid to the lender of funds, the buyer of the securities. If this buyer has a particular need, he is able to charge a lower rate of interest to lend the money.

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18. Cross currency repos offer investors an opportunity of a yield gain. 
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19. The economy of Country A is performing well and market participants feel that this performance will at least be sustained in the future. Therefore, other things being equal, which of the following are likely to occur?
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20. In what year did the League of Nations convene to provide a uniform law for Bills of Exchange?
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21. It is a benchmark rate that some of the world's leading banks charge each other for short-term notes. 
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22. What does LIBOR stand for?
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23. Deposit rate for borrowing and lending is a -
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24. Money market securities are short-term debt instruments (one year or less)

Explanation

Money market securities are short-term debt instruments (one year or less)

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25. Money market securities are long-term debt instruments.

Explanation

Money market securities are short-term debt instruments (one year or less)

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26. Money market transactions provide an avenue for both acquiring money (borrowing) and investing (lending) excess funds for short periods
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27. Which of the following statements is true?
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28. Base rates are quoted for borrowing and lending funds in the wholesale markets.

Explanation

Interbank rates are quoted for borrowing and lending funds in the interbank (wholesale) markets.

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29. When issuers of commercial paper sell their issues directly to the public using their own sales force, the commercial paper is said to be -
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30. When issuers of commercial paper sell their issues directly to the public using their own sales force, the commercial paper is said to be "directly placed"
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31. Which 2 of the following statements are CORRECT regarding LIBOR?
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32. When issuers sell CP to large commercial paper dealers who then resell the issue to the public, the instrument is said to be "dealer placed"
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33. Bankers' acceptances are used to facilitate foreign trade.
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34. Bankers' acceptances are actively traded and are considered quite safe since they are secured both by the issuing bank and by the goods originally purchased by the importer.
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35. The average of LIBOR and LIBID

Explanation

LIMEAN (London Interbank Mean Rate) is the mid-market rate, that is, the average of LIBOR and LIBID.

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36. In a repurchase agreement (repo), a dealer sells securities to another dealer and agrees to repurchase them at a specific time, at a specified price.
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37. Repos and reverse repos are typically long-term

Explanation

Repos and reverse repos are typically short-term, with most being overnight transactions.

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38. What is an interbank rate?
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39. Bills of Exchange are unconditional orders to pay a stated sum of money on a specified date.
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40. Bills of Exchange are __________ orders to pay a stated sum of money on a specified date.
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41. Bills of Exchange are accepted by banks.
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42. Banks do not accept bills of exchange.
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43. Bank bill is another term for bankers acceptance.
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44. The ideal period for a Bill of Exchange is the same as the period for which the goods are in transit.
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45.   A Bill of Exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand at a fixed or determinable future time, a sum certain in money to or to the order of a specified person or to the bearer.
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46. Bill of Exchange is one of the oldest credit instruments in the world.
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47. These are rates that are calculated as an average of market quoted prices. 
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48. Bills of Exchange were first mentioned in statute of 1379.
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49. Bills of Exchange are used between trading parties to make the process of payment for goods more efficient.
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50. Can trading parties use bills of exchange to process payment for goods?
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51. Clearly, the Bill of Exchange must contain financial conditions.
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52. What was the interbank rate used in France prior to January 1, 1999?

Explanation

Until 1999, financial centers within the euro area had their own interbank rates such as FIBOR (Frankfurt) and PIBOR (Paris). However, with the introduction of the EURO, a single euro area interbank rate (EURIBOR) has been quoted since 1999 instead of these local interbank rates.

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53. A Bill of Exchange would enable the ___________  of goods to receive payment immediately and allow the ____________ of the goods to defer payment until the goods are actually delivered.
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54. Bills of Exchange are used by buyers and sellers of goods to finance importation of goods.
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55. If a Bill of Exchange is drawn on a bank, it is called a  ________ draft.
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56. If a Bill of Exchange is drawn on another party, it is called a trade draft.
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57. A Letter of Credit is an arrangement between banks and customers to pay and accept bills that are drawn up on the conditions specified in the Letter of Credit.
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58. A Letter of _________   is an arrangement between banks and customers to pay and accept bills that are drawn up on the conditions specified in the Letter of Credit.
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59. A Letter of Credit will specify which of the following conditions: (select all that apply)
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60. A Bill of Exchange is generally a bearer instrument.
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61. Match the following
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62. Investing in a call deposit will ensure that the deposited amount from the borrower can be reclaimed within the agreed notice period.
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63. How many day/s is the shortest period for a call deposit?
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64. Central Banks may lend directly to commercial banks.
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65. Can a Bill of Exchange be made payable to the bearer?

Explanation

A Bill of Exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand at a fixed or determinable future time, a sum certain in money to or to the order of a specified person or to the bearer.

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66. Investing in a fixed deposit will guarantee a fixed return from a liquid investment.
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67. Money market instruments have period ranging from overnight to a few months, but may be as long as 1 year.
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68. In a call deposit, the deposited amount from the borrower can be reclaimed within the agreed notice period.
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69. In a third-party repo, all transactions are monitored by the third party agent.
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70. A US Commercial paper would be exempt from the prospectus requirements of the Act of 1933.
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71. Which rating agency assigns A1 (highest rating) to A3  to commercial paper?
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72. Participants to money-market include which of the following: (select all that apply)

Explanation

Participants to money-market include Federal Reserve Board, banks, securities dealers, and corporations.

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73. Bills of Exchange were widely used in England around the time of the Norman Conquest.
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74. If a Bill of Exchange is drawn on a bank, it is called a bank draft.
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75. Customers with strong credit ratings will be able to borrow from banks at a rate close to the prime rate.

Explanation

Customers with strong credit ratings will be able to borrow from banks at a rate close to to the prime rate, while those with a weaker credit rating will have to pay a higher premium over the prime rate to reflect their perceived higher credit risk.

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76. Which of the following are NOT examples of money-market securities. Select all that apply.

Explanation

All are examples of money-market securities

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77. Commercial paper is short-term, unsecured corporate debt, which typically matures in 270 days or less (for the United States)
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78. Commercial paper is long-term, unsecured corporate debt, which typically matures in 1 year or more.
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79. Repos and reverse repos are typically short-term, with most being overnight transactions.
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80. Interest rates of Certificates of Deposits are NOT fixed.

Explanation

Certificates of Deposits are time deposits carrying fixed rates of interest that mature after a specified period.

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81. A Bill of Exchange is a non-interest bearing instrument.
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82. Market participant rates are rates or prices charged by individual market players for money-market deals.
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83. Who is the legal owner of securities during repo?

Explanation

Legal ownership of the securities is normally transferred from the cash borrower to the cash lender for the duration of the repo.

However, despite legal change of ownership, the coupon on the securities belongs to the original seller

In a classic repo structure any coupons paid during the term of the repo must be immediately passed on to the original owner. In a sell/buy back the coupon will be paid at the end of the repo agreement.

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84. Which rating agency assigns F1+ (highest rating) to F3  to commercial paper?  
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85. Central bank rates are rates at which central banks make funds available to the banks in the money markets.
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86. At what price are the securities sold in a repurchase agreement? 

Explanation

The securities are normally sold at current market prices, and bought back with interest.

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87. The most common maturity of a central bank rate is O/N

Explanation

The most common maturity is overnight (O/N) as the primary purpose is to ensure the banks have enough liquidity to meet demand.

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88. Typically, the minimum denomination of US commercial paper is $100,000
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89. A Bill of exchange is also known as time draft.
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90. Time draft is another term for a bill of exchange.
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91. Banks do not accept Letters of Credit.
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92. Bills of Exchange are said to be existent way back 4th century BC.
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93. A Bill of Exchange would enable the seller of goods to receive payment immediately and allow the buyer f the goods to defer payment until the goods are actually delivered.
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94. Investing in a ______ deposit will guarantee a fixed return from _________ investment.
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95. What is the primary use of repurchase agreements?

Explanation

While reverse repos are used to close out short positions, repos are primarily used to finance long positions

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96. A Bill of Exchange is a negotiable instrument that protects international traders from the uncertainties of payments and deliveries.
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97. Money market basis (ACTUAL/360) is commonly used for all Euro currency rates.

Explanation

Money market basis is commonly used for all Eurocurrency LIBOR rates, except sterling. The day count fraction is defined as the actual number of days in the period over 360.

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98. In a third-party repo, settlement risk is increased.

Explanation

In a tri-party repo, settlement risk is reduced because the custodian monitors the deal and holds the collateral.

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99. In a third-party repo, the custodian's fee is usually paid by the cash borrower.

Explanation

For this service the custodian receives a fee from the cash borrower.

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100. Which of the following statements is CORRECT about Money Market basis?
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101. LIBOR and EURIBOR are examples of --
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102. Prime rates are quoted for borrowing and lending funds in the wholesale markets.

Explanation

Interbank rates are quoted for borrowing and lending funds in the interbank (wholesale) markets.

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103. Corporations issue commercial paper when they are in need of short-term financing.
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104. Commercial paper is usually issued at a discount like Treasury Bills, although some issues are interest bearing.
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105. When issuers sell CP to large commercial paper dealers who then resell the issue to the public, the instrument is said to be -
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106. Bankers' acceptances are illiquid and risky instruments since they are not secured by the issuing bank.
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107. If a dealer purchases securities and agrees to sell them back to the other dealer at a specific date and price, this is known as "reverse repo" or "matched sale"
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108. Certificates of Deposits are time deposits carrying fixed rates of interest that mature after a specified period.
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109. Prime rate is also known as interbank rate.

Explanation

Prime rate is a short-term interest rate that banks charge to their most creditworthy customers while Interbank rate is a rate quoted by one bank to another.

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110. Banks can accept trade bills.

Explanation

Trade bills would never be accepted by banks.

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111. Letters of Credit are accepted by banks.
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112. The most common maturities for Bills of Exchange range between 30 days to 6 months.
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113. The Bill of Exchange is one of the newest credit instruments in the world.
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114. O/N is the term for a trasaction where the first value date is _______ and the maturity date is the next business day.
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115. Commercial paper is usually issued by corporations with high credit ratings and is considered very safe.
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116. Typically, what is the minimum denomination of US commercial paper?
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117. Bills of Exchange are usually preceded by the opening of a Letter of Credit.
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118. Which of the following statements is true about money-market instruments?
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119. In a repurchase agreement (repo), a dealer sells securities to another dealer and may not repurchase them at a specific time, at a specified price.

Explanation

In a repurchase agreement (repo), a dealer sells securities to another dealer and agrees to repurchase them at a specific time, at a specified price.

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120. The Bund proceeds of EUR 10,039,685 will then have to be converted to USD at the rate of 1.2745. EUR 10,039,685 x 1.2745 = USD 12,795,579. If this is repoed out, which repo rate should be used?  The rates quoted on the screen are: USD 3.10 - 3.15
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121. Trade bills would never be accepted by banks.
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122. A   is a secured deposit whereas a  is a secured borrowing.
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123. Which of the following countries has the oldest established repo market?

Explanation

The oldest repo market is that of the US. Although the origins of the US repo market can be traced back to the early part of the 20th century, it was not until after World War II that repos became a significant money market instrument.

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124. In a repo, margining is built to whose protection?

Explanation

As the value of the securities in a repo transaction can rise or fall, margining is built in to protect the cash lender.

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125. Who transacts the repo?

Explanation

This is performed by the cash borrower.

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126. Central banks never lend directly to commercial banks.
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127. A buy/sell back transaction is the economic equivalent of a reverse repo transaction.
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128. When a deliver-out repo is transacted, the possession of collateral 

Explanation

A deliver-out repo is the standard repo transaction whereby possession of the collateral is actually passed onto the cash lender.

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129. It is the party that issues a Bill of Exchange in an international trade transaction; usually the seller.
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130. Which of the following is a market average rate?

Explanation

EURIBOR is the rate at which Euro interbank deposits within the EURO area are offered by one bank to another bank. The rate is determined by a panel of banks chosen by the European Banking Federation (EBF) and published on Reuters at 11 a.m. on a daily basis.

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131. Participants to money-market include Federal Reserve Board, banks, securities dealers, and corporations.
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132. Corporations issue commercial paper when they are in need of long-term financing.
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133. British Bankers' Association (BBA) compiles indicative LIBID rates.

Explanation

It is important to note that the British Bankers' Association (BBA) DOES NOT compile indicative LIBID rates.

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134. Which rating agency assigns NP to speculative commercial paper?
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135. Prime rate is also known as base rate.
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136. Interbank rates are quoted for borrowing and lending funds in the wholesale markets.
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137. Bankers' acceptances CANNOT be used to facilitate foreign trade.
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138. These are rates at which the central banks make funds available to the banks in the money markets.
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139. The following statements regarding EONIA are correct EXCEPT --

Explanation

EONIA is short for Euro Overnight Index Average.

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140. The minimum maturity of CD is 7days and maximum maturity is 1 year.

Explanation

While most CDs mature in a year or less, the minimum maturity is 7 days and there is no maximum.

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141. Base rate is a short-term interest rate that banks charge to their most creditworthy customers.

Explanation

The prime rate is a short-term interest rate that banks charge to their most creditworthy customers. It is also known as the base rate.

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142. Bill of exchange is also known as commercial bill.
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143. Which of the following statements is NOT CORRECT about Day Count Convention?
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144. Bankers acceptances are also known as bank bills.
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145. Banks offer borrowers different rates depending on borrower's credit rating.

Explanation

Banks offer borrowers different rates depending on the risk category to which the borrower belongs, that is, depending on the borrower's credit rating.

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146. A Bill of Exchange bears interest.

Explanation

A Bill of Exchange is a non-interest bearing instrument.

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147. If a Bill of Exchange is drawn on another party, it is called a ________ draft. 
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148. Bills of Exchange are usually followed by opening a Letter of Credit.

Explanation

Bills of Exchange are usually preceded by the opening of a Letter of Credit.

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149. Financial conditions are required to be reflected on a bill of exchange.
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150. Issuers of money-market instruments include which of the following: (check all that apply)

Explanation

Issuers include government, government agencies, banks and corporations.

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151. The origins of Bills of Exchange can be tracked back to at least the 4th century BC.
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152. The ideal period for a Bill of Exchange is longer as compared to the period for which the goods are in transit.

Explanation

The ideal period for a Bill of Exchange is the same as the period for which the goods are in transit.

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153. The shortest period for a call deposit transaction is 1 day.
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154. Fill in the blank: When currency is GBP, the formula for computation of interest rate is : Principal x Rate x (no of days /  ______ )
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155. Repurchase agreements first became a significant money market instrument in the US:

Explanation

Although the origins of repos can be traced back to the early part of the 20th century, it was not until after World War II that they became a significant money market instrument.

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156. Who holds the collateral in a hold-in-custody repo? 

Explanation

In a hold-in-custody repo, possession of the collateral remains with the cash borrower. Despite this, many lenders have shown a preference for the securities to be held by a third party (tri-party repo).

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157. Which is the most common maturity used for central bank rates?

Explanation

The most common maturity is overnight (O/N) as the primary purpose is to ensure the banks have enough liquidity to meet demand.

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158. It is the party to whom the bill is payable; usually the seller or their bankers.
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159. Which of the following are examples of money-market securities. Select all that apply.

Explanation

All are examples of money-market securities

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160. What is the highest rating that Moody's will assign to commercial paper?

Explanation

P-1 (also called Prime 1) is the highest rating that Moody's will assign to commercial paper. Intermediate ratings are P-2 and P-3.

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161. Which rating agency assigns P-1 to commercial paper being the highest rating?
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162. Bills of Exchange are used by buyers and sellers of goods to finance which of the following: (Select all that apply)
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163. It is the recipient of the Bill of Exchange for payment or acceptance in an international trade transaction; usually the buyer.
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164. Unlike Treasury bills, commercial paper cannot be issued at a discount.

Explanation

Commercial paper is usually issued at a discount like Treasury Bills, although some issues are interest bearing.

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165. Commercial paper is usually issued by Central Bank and is considered very safe.

Explanation

Commercial paper is usually issued by corporations with high credit ratings and is considered very safe.

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166. A Bill of Exchange is a non-negotiable instrument that protects international traders from the uncertainties of of payments and deliveries.

Explanation

A Bill of Exchange is a negotiable instrument.

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167. Interbank rate is a short-term interest rate that banks charge to their most creditworthy customers.

Explanation

The prime rate is a short-term interest rate that banks charge to their most creditworthy customers. It is also known as the base rate.

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168. When a country is performing well and market participants feel that this performance will at least be sustained in the future, interest rates will tend to ____________.
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169. A repo transaction involves:
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170. You are given the following details about a new repo transaction: Security: GBP 100m of 5% Exchequer 20X1 Market (Clean) Price: 100.00 (currently trading at par) Accrued Interest: GBP 410,959 Initial Margin Rate: 1% Calculate the cash lent under the repo. Input your answer correct to the nearest whole number. GBP  

Explanation

The market value of the collateral including accrued interest is:
MV = GBP 100,000,000 + GBP 410,959 = GBP 100,410,959

Given a margin rate of 1%, the cash lent under the repo is:

Cash Lent = GBP 100,410,959 / 1.01 = GBP 99,416,791 (rounded)

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171. EUR 100,000,000 nominal of a 10-year 4% Bund is used in a buy/sell back transaction. The market value of the position is EUR 101,230,565 (this includes accrued interest of EUR 244,444). The transaction is for one week and the repo rate is 2.50%. How much is the repo interest? Round off your answer using 2 decimal places.
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172. All of the following statements regarding EURIBOR are correct EXCEPT - 

Explanation

When EURIBOR is being mentioned, it is often referred to as THE EURIBOR, like there's only 1 EURIBOR interest rate. This is not correct, since there are in fact 8 different EURIBOR rates, all with different maturities.

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173. These are rates (or prices) charged by individual market players for money market deals.
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174. This is the rate at which major banks can bid to borrow funds from each other on the interbank market.

Explanation

LIBID (London Interbank Bid Rate) is a rate at which major banks can bid to borrow funds from each other on the interbank market. It is the bid side of the LIBOR.

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175. Commercial paper is subject to the prospectus requirements of the Act of 1933.

Explanation

Commercial paper would be exempt from the prospectus requirements of the Act of 1933.

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176. If a dealer purchases securities and agrees to sell them back to the other dealer at a specific date and price, this is known as "repo"

Explanation

If a dealer purchases securities and agrees to sell them back to the other dealer at a specific date and price, this is known as "reverse repo" or "matched sale"

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177. Interbank rate is also knows as base rate.

Explanation

Prime rate is also known as base rate.

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178. While most CDs mature in a year or less, the minimum maturity is 7 days and there is no maximum.
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179. Commercial bill is another term of a bill of exchange.
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180. The most common maturities for Bills of Exchange range between ______ days to  6 months.
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181. Bills of Exchange were first mentioned in statute of which year?
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182. The Bill of Exchange is one of the newest credit instruments in the world.
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183. Calculate the start proceeds (to the nearest whole number) for the deal to repo out the below security: USD 30 million US Treasuries 4.5% 11 November 20X6 trading at 100.50 (clean price). Day count 26 days USD 

Explanation

The answer is USD 30,245,380 (rounded). The calculation is USD 30,000,000 x (100.50 + (100 x 4.5%/2 x 26/184))/100 = 30,245,380.43, so this is the amount that can be borrowed against this collateral. The borrowing rate for this is the repo rate of 3.15%.

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184. The EURIBOR rates are based on the interest rates at which a panel of European banks borrow funds from one another.
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185. EUR 100,000,000 nominal of a 10-year 4% Bund is used in a buy/sell back transaction. The market value of the position is EUR 101,230,565 (this includes accrued interest of EUR 244,444). The transaction is for one week and the repo rate is 2.50%. Compute for the forward dirty price. Round off your answer using 2 decimal places.
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186. Which of the following refers to a transaction where the first value date is today and the maturity date is the next business day?

Explanation

Overnight (O/N) is the term for a transaction where the first value date is today and the maturity date is the next business day.

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187. Money market basis (ACTUAL/360) is commonly used for all Eurocurrency LIBOR rates, EXCEPT sterling.

Explanation

Money market basis is commonly used for all Eurocurrency LIBOR rates, except sterling. The day count fraction is defined as the actual number of days in the period over 360.

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188. Which 2 of the following laws regulate Bills of Exchange in different countries?
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189. US Fed Funds rates and ECB marginal lending and deposit facility rates are examples of --
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190. Issuers include government, government agencies, banks and corporations.
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191. Match the following
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192. Match the following
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193. What rating does Moody's assign to speculative commercial paper?

Explanation

Speculative commercial paper would receive a rating of NP (not prime)

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194. What is the highest rating does S&P assign to commercial paper?
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195. What is the highest rating does Fitch assign to commercial paper?
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196. Which of the following statements is CORRECT about Money Market basis?
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197. Match the following
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198. Bills of Exchange were widely used in which country around the time of the Norman Conquest?
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A fixed deposit is a deposit placed for a fixed period at a fixed rate...
A _______ deposit is a deposit placed  for a fixed period at a...
What is the interest rate to pay for GBP 1-M for 1 year at 6%? (write...
Fill in the blank:...
Can Central Banks directly lend to commercial banks?
O/N is the term for a transaction where the first value date is today...
When a country is performing well and market participants feel that...
An example of market participant rate is the deposit rate for...
The origins of Bills of Exchange can be tracked back to at least the...
The primary purpose of Central banks in lending to commercial banks is...
Prime rate refers to a short-term interest rate that banks charge...
In a special repo, 'special' refers to the:
To close out a short position in a particular security, a dealer would...
Today is June 6. The repo dealer at DEF Bank has been asked to do some...
When the dealer looks at the bank's available collateral, he...
What do you think is the most common maturity for repurchase...
If a security goes on special, the repo rate applied to this...
Cross currency repos offer investors an opportunity of a yield...
The economy of Country A is performing well and market participants...
In what year did the League of Nations convene to provide a uniform...
It is a benchmark rate that some of the world's leading banks...
What does LIBOR stand for?
Deposit rate for borrowing and lending is a -
Money market securities are short-term debt instruments (one year or...
Money market securities are long-term debt instruments.
Money market transactions provide an avenue for both acquiring money...
Which of the following statements is true?
Base rates are quoted for borrowing and lending funds in the...
When issuers of commercial paper sell their issues directly to the...
When issuers of commercial paper sell their issues directly to the...
Which 2 of the following statements are CORRECT regarding LIBOR?
When issuers sell CP to large commercial paper dealers who then resell...
Bankers' acceptances are used to facilitate foreign trade.
Bankers' acceptances are actively traded and are considered quite...
The average of LIBOR and LIBID
In a repurchase agreement (repo), a dealer sells securities to another...
Repos and reverse repos are typically long-term
What is an interbank rate?
Bills of Exchange are unconditional orders to pay a stated sum of...
Bills of Exchange are __________ orders to pay a stated sum of money...
Bills of Exchange are accepted by banks.
Banks do not accept bills of exchange.
Bank bill is another term for bankers acceptance.
The ideal period for a Bill of Exchange is the same as the period for...
  ...
Bill of Exchange is one of the oldest credit instruments in the world.
These are rates that are calculated as an average of market quoted...
Bills of Exchange were first mentioned in statute of 1379.
Bills of Exchange are used between trading parties to make the process...
Can trading parties use bills of exchange to process payment for...
Clearly, the Bill of Exchange must contain financial conditions.
What was the interbank rate used in France prior to January 1, 1999?
A Bill of Exchange would enable the ___________  of goods to...
Bills of Exchange are used by buyers and sellers of goods to finance...
If a Bill of Exchange is drawn on a bank, it is called a...
If a Bill of Exchange is drawn on another party, it is called a trade...
A Letter of Credit is an arrangement between banks and customers to...
A Letter of _________   is an arrangement between banks and...
A Letter of Credit will specify which of the following conditions:...
A Bill of Exchange is generally a bearer instrument.
Match the following
Investing in a call deposit will ensure that the deposited amount from...
How many day/s is the shortest period for a call deposit?
Central Banks may lend directly to commercial banks.
Can a Bill of Exchange be made payable to the bearer?
Investing in a fixed deposit will guarantee a fixed return from a...
Money market instruments have period ranging from overnight to a few...
In a call deposit, the deposited amount from the borrower can be...
In a third-party repo, all transactions are monitored by the third...
A US Commercial paper would be exempt from the prospectus requirements...
Which rating agency assigns A1 (highest rating) to A3  to...
Participants to money-market include which of the following: (select...
Bills of Exchange were widely used in England around the time of the...
If a Bill of Exchange is drawn on a bank, it is called a bank draft.
Customers with strong credit ratings will be able to borrow from banks...
Which of the following are NOT examples of money-market securities....
Commercial paper is short-term, unsecured corporate debt, which...
Commercial paper is long-term, unsecured corporate debt, which...
Repos and reverse repos are typically short-term, with most being...
Interest rates of Certificates of Deposits are NOT fixed.
A Bill of Exchange is a non-interest bearing instrument.
Market participant rates are rates or prices charged by individual...
Who is the legal owner of securities during repo?
Which rating agency assigns F1+ (highest rating) to F3  to...
Central bank rates are rates at which central banks make funds...
At what price are the securities sold in a repurchase agreement? 
The most common maturity of a central bank rate is O/N
Typically, the minimum denomination of US commercial paper is $100,000
A Bill of exchange is also known as time draft.
Time draft is another term for a bill of exchange.
Banks do not accept Letters of Credit.
Bills of Exchange are said to be existent way back 4th century BC.
A Bill of Exchange would enable the seller of goods to receive...
Investing in a ______ deposit will guarantee a fixed return from...
What is the primary use of repurchase agreements?
A Bill of Exchange is a negotiable instrument that protects...
Money market basis (ACTUAL/360) is commonly used for all Euro currency...
In a third-party repo, settlement risk is increased.
In a third-party repo, the custodian's fee is usually paid by the...
Which of the following statements is CORRECT about Money Market basis?
LIBOR and EURIBOR are examples of --
Prime rates are quoted for borrowing and lending funds in the...
Corporations issue commercial paper when they are in need of...
Commercial paper is usually issued at a discount like Treasury Bills,...
When issuers sell CP to large commercial paper dealers who then resell...
Bankers' acceptances are illiquid and risky instruments since they...
If a dealer purchases securities and agrees to sell them back to the...
Certificates of Deposits are time deposits carrying fixed rates of...
Prime rate is also known as interbank rate.
Banks can accept trade bills.
Letters of Credit are accepted by banks.
The most common maturities for Bills of Exchange range between 30 days...
The Bill of Exchange is one of the newest credit instruments in the...
O/N is the term for a trasaction where the first value date is _______...
Commercial paper is usually issued by corporations with high credit...
Typically, what is the minimum denomination of US commercial paper?
Bills of Exchange are usually preceded by the opening of a Letter of...
Which of the following statements is true about money-market...
In a repurchase agreement (repo), a dealer sells securities to another...
The Bund proceeds of EUR 10,039,685 will then have to be converted to...
Trade bills would never be accepted by banks.
A    reverse repo repo  is a...
Which of the following countries has the oldest established repo...
In a repo, margining is built to whose protection?
Who transacts the repo?
Central banks never lend directly to commercial banks.
A buy/sell back transaction is the economic equivalent of a reverse...
When a deliver-out repo is transacted, the possession of...
It is the party that issues a Bill of Exchange in an international...
Which of the following is a market average rate?
Participants to money-market include Federal Reserve Board, banks,...
Corporations issue commercial paper when they are in need of long-term...
British Bankers' Association (BBA) compiles indicative LIBID...
Which rating agency assigns NP to speculative commercial paper?
Prime rate is also known as base rate.
Interbank rates are quoted for borrowing and lending funds in the...
Bankers' acceptances CANNOT be used to facilitate foreign trade.
These are rates at which the central banks make funds available to the...
The following statements regarding EONIA are correct EXCEPT --
The minimum maturity of CD is 7days and maximum maturity is 1 year.
Base rate is a short-term interest rate that banks charge to...
Bill of exchange is also known as commercial bill.
Which of the following statements is NOT CORRECT about Day Count...
Bankers acceptances are also known as bank bills.
Banks offer borrowers different rates depending on borrower's...
A Bill of Exchange bears interest.
If a Bill of Exchange is drawn on another party, it is called a...
Bills of Exchange are usually followed by opening a Letter of Credit.
Financial conditions are required to be reflected on a bill of...
Issuers of money-market instruments include which of the following:...
The origins of Bills of Exchange can be tracked back to at least the...
The ideal period for a Bill of Exchange is longer as compared to the...
The shortest period for a call deposit transaction is 1 day.
Fill in the blank:...
Repurchase agreements first became a significant money market...
Who holds the collateral in a hold-in-custody repo? 
Which is the most common maturity used for central bank rates?
It is the party to whom the bill is payable; usually the seller or...
Which of the following are examples of money-market securities. Select...
What is the highest rating that Moody's will assign to commercial...
Which rating agency assigns P-1 to commercial paper being the highest...
Bills of Exchange are used by buyers and sellers of goods to finance...
It is the recipient of the Bill of Exchange for payment or acceptance...
Unlike Treasury bills, commercial paper cannot be issued at a...
Commercial paper is usually issued by Central Bank and is considered...
A Bill of Exchange is a non-negotiable instrument that protects...
Interbank rate is a short-term interest rate that banks charge to...
When a country is performing well and market participants feel that...
A repo transaction involves:
You are given the following details about a new repo transaction:...
EUR 100,000,000 nominal of a 10-year 4% Bund is used in a...
All of the following statements regarding EURIBOR are correct EXCEPT...
These are rates (or prices) charged by individual market players for...
This is the rate at which major banks can bid to borrow funds from...
Commercial paper is subject to the prospectus requirements of the Act...
If a dealer purchases securities and agrees to sell them back to the...
Interbank rate is also knows as base rate.
While most CDs mature in a year or less, the minimum maturity is 7...
Commercial bill is another term of a bill of exchange.
The most common maturities for Bills of Exchange range between ______...
Bills of Exchange were first mentioned in statute of which year?
The Bill of Exchange is one of the newest credit instruments in the...
Calculate the start proceeds (to the nearest whole number) for the...
The EURIBOR rates are based on the interest rates at which a panel of...
EUR 100,000,000 nominal of a 10-year 4% Bund is used in a...
Which of the following refers to a transaction where the...
Money market basis (ACTUAL/360) is commonly used for all Eurocurrency...
Which 2 of the following laws regulate Bills of Exchange in different...
US Fed Funds rates and ECB marginal lending and deposit facility rates...
Issuers include government, government agencies, banks and...
Match the following
Match the following
What rating does Moody's assign to speculative commercial paper?
What is the highest rating does S&P assign to commercial paper?
What is the highest rating does Fitch assign to commercial paper?
Which of the following statements is CORRECT about Money Market basis?
Match the following
Bills of Exchange were widely used in which country around the time of...
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