Financial Markets Foundation Course (FMFC) Free Practice Test

Question 1

Which of the following factors is true of forward contracts but not of futures contracts?

A. They are flexible in terms of maturity rate

B. The deals are bilateral OTC contracts

C. They are a means of fixing forward rates

D. They can be either bought or sold by market participants

Correct Answer: B

Question 2

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?

A. 6.6371

B. 6.5392

C. 6.5389

D. 6.5384

Correct Answer: D

Question 3

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?

A. EUR 46.00

B. EUR 2.80

C. Cannot say - it depends on market movements

D. EUR 43.20

Correct Answer: B

Question 4

CHIPS is the payment system for which currency?

A. USD

B. CHF

C. EURO

D. GBP

Correct Answer: A

Question 5

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

A. FTSE10C0

B. DJIA

C. CAC40

D. S&P 500

Correct Answer: B

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