Intro to Banking Products

What is the tenor of most trade finance loans?

• 30–90 days

• 90–180 days

• 180–270 days

Which of the following is an example of good risk management when agreeing terms and conditions for loans to corporate customers?

• Matching competitors' product parameters

• Aligning tenor with the expected timeframe for receipt of the repayment source

• Providing commercial real estate loans on a nonrecourse basis

Which of the following is a type of revolving credit facility?

• Term loan

• Overdraft

• Trade finance guarantee

Which of the following types of customer account is most likely to provide banks with the use of interest-free balances?

• Checking/current accounts

• Savings/deposit accounts

• Fixed term accounts

A customer's operations comprise four branches and three subsidiaries, each of which operates a number of checking and deposits accounts. From a liquidity management point of view, which of the following arrangements would be most beneficial for the customer?

• Sweeping for all the branch and subsidiary accounts

• Sweeping for the branch accounts only

• Pooling for the subsidiary accounts only

Which of the following payment instruments is/are initiated by the payee?

• Debit transfer

• Credit transfer

• Debit transfer & Credit transfer

• Debit transfer & Standing Order

How do regulators ensure that the risk of a clearing system failing to settle at end-of-day is mitigated?

• By requiring member banks to provide guarantees

• By using net settlement

• By closely monitoring operations on a daily basis

Which of the following statements is true in relation to checks?

• Checks must be prepared and signed manually.

• Payers benefit from the float until a check is paid.

• The original check will not be paid if a duplicate needs to be issued.

What name is given to an instrument that allows money market participants to pay/receive the difference between two benchmark interest rates?

• Interest rate guarantee (IRG)

• Basis swap

• Forward rate agreement (FRA)

Which of the following is the administrator for LIBOR?

• British Bankers’ Association (BBA)

• Federal Reserve

• International Swaps and Derivatives Association (ISDA)

• ICE Benchmark Administration (IBA)