ICMA FMFQ Exam Practice Test Instant Access

Question 1

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

AUDS

BJPY

CEUR

DGBP

Answer : D

Question 2

Where is the largest centre for FX trading?

ALondon

BNew York

CSingapore

DHong Kong

Answer : A

Question 3

You have just bought a USD 5,000,000 of a 3 month Commercial paper (91 days) qupted at a discount to yield of 4.5% (A/360). How much will you pay for this security?

AFace value

BMore than face value

CLess than face value

DNeed more information

Answer : C

Question 4

A customer wants to sell SEK and asks 4 banks for a rate. Which of the following would be the best rate for the customer?

A6.5389

B6.5392

C6.5384

D6.6371

Answer : C

Question 5

A company's share price fall below its net asset value. The company is then the subject of a takeover after which rather than being run as a going concern it is broken up and its assets sold to achieve maximum value. This is an example of which of the following strategies?

ALeveraged investment

BAsset stripping

CMergers & Acquisitions

DLeveraged buyout

Answer : B

Question 6

You have sold a put on a stock at a strike of EUR 46 for a premium of EUR 2.80. What is your maximum profit on this deal?

ACannot say - it depends on market movements

BEUR 46.00

CEUR 43.20

DEUR 2.80

Answer : D

Question 7

Which of the following best describes LIBOR?

AThe average rate at which wholesale bank deposits have taken place over the past 24 hours (since the last LIBOR fix)

BThe average rate at which wholesale banks are offering one another money at fixing time

CThe highest rate at which wholesale banks are offering one another money at fixing time

DThe average rate at which wholesale banks have offered money to their customers over the past 24 hours (since the last LIBOR fix)

Answer : B

ICMA Financial Markets Foundation Qualification Exam Practice Test