Which one of the following four statements about economic capital of a bank is correct?

• A.Economic capital reflects the possible losses that could occur based on the bank's own estimates of the
  risks it is taking.
• B.Economic capital is determined by rules imposed by an external authority.
• C.Economic capital measures how the economy is doing compared to the bank.
• D.Economic capital is the present value of the earnings generated by the bank in the future.

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

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

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Which one of the following four options is NOT a typical component of a currency swap?

• A.Denomination of the original notional amount into a foreign currency
• B.A final currency exchange
• C.An initial currency exchange of the notional amount
• D.Periodic exchange of interest payments in different currencies

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A customer of EtaBank, Alfred Fall, fell on the marble floors of the bank and sustained substantial injuries.
Subsequently, he won a personal injury claim of $50,000 against EtaBank. How should EtaBank's operational
loss data event information database categorize this event?

• A.This event would qualify as "Legal Risk".
• B.This event would qualify as "Business Disruption and System Failures".
• C.This event would qualify as "Employment Practices and Workplace Safety".
• D.This event would not qualify as an operational risk event.

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A bank customer expecting to pay its Brazilian supplier BRL 100 million asks Alpha Bank to buy Australian
dollars and sell Brazilian reals. Alpha bank does not hold Brazilian reals so it asks for a quote to buy Brazilian
reals in the market. The market rate is 100. The bank quotes a selling rate of 101 to its customer, sells the
reals, and receives AUD 1,010,000. To perform foreign exchange matched position trading, the banks should

• A.Immediately buy the real at the market rate of 100 and pay AUD 1,000,000.
• B.Immediately sell the real above the market rate of 105 and receive AUD 1,050,050.
• C.Immediately sell the real at the market rate of 100 and receive AUD 1,000,000.
• D.Immediately buy the real above the market rate of 105 and pay AUD 1,050,050.

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