Online Access Free ICBRR Exam Questions

A large multinational bank is concerned that their duration measures may not be accurate since the yield curve shifts are not parallel. Which of the following statements would be typically observed regarding variability of interest rates?

• A.Short-term rates are more variable than long-term rates.
• B.Short-term rates are equally variable as long-term rates.
• C.Short-term rates and long-term rates always move in opposite directions.
• D.Short-term rates are less variable than long-term rates.

Which of the following statements about endogenous and external types of liquidity are accurate?
I. Endogenous liquidity is the liquidity inherent in the bank's assets themselves.
II. External liquidity is the liquidity provided by the bank's liquidity structure to fund its assets and maturing liabilities.
III. External liquidity is the non-contractual and contingent capital supplied by investors to support the bank in times of liquidity stress.
IV.
Endogenous liquidity is the same as funding liquidity.

• A.I, II, IV
• B.II, III
• C.I, II
• D.I, III

A credit associate extending a loan to an obligor suspects that the obligor may change his behavior after the loan has been originated. The obligor in this case may use the loan proceeds for purposes not sanctioned by the lender, thereby increasing the risk of default. Hence, the credit associate must estimate the probability of default based on the assumptions about the applicability of the following tendency to this lending situation:

• A.Moral hazard
• B.Short bias
• C.Speculation
• D.Adverse selection

Short-selling is typically associated with the following risks:
I. Potential for extreme losses
II. Risk associated with the availability of shares to borrow
III. Market behavior risk
IV.
Liquidity risk

• A.I, II, III, IV
• B.I, II
• C.I, III
• D.II, IV

Which one of the following four features is NOT a typical characteristic of futures contracts?

• A.Fixed dates for delivery
• B.Daily margin calls
• C.Traded Over-the-counter only
• D.Fixed notional amount per contract