Which one of the following four statements regarding commodity exchanges is INCORRECT?

• A.Commodity markets are mot liquid than debt markets.
• B.Banks trade in OTC contracts primarily to serve clients and facilitate client hedging and lending.
• C.Customers rarely trade physical commodities with banks.
• D.Banks have no natural direct exposure to commodities.

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All of the following factors generally explain the equity bid-offer spread in a market EXCEPT:

• A.Interest rates
• B.Market depth
• C.Competition among market makers
• D.Market volatility

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Which one of the following areas does not typically report into a central operational risk function?

• A.Information security
• B.Business continuity planning
• C.Embedded operational risk coordinators or specialists or managers
• D.Geopolitical and strategic planning

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A risk analyst is considering how to reduce the bank's exposure to rising interest rates. Which of the following
strategies will help her achieve this objective?
I. Reducing the average repricing time of its loans
II. Increasing the average repricing time of its deposits
III. Entering into interest rate swaps
IV. Improving earnings capacity and increasing intermediated funds

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

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Which one of the following four statements about market risk is correct? Market risk is

• A.The maximum likely loss in the market value of portfolios and financial instruments over a given period
  of time.
• B.The maximum likely loss in the market value of portfolios and financial instruments caused by the
  failure of the counterparty to meet its obligations.
• C.The exposure to an adverse change in the credit quality in portfolios or of financial instruments.
• D.The exposure to an adverse change in the market value of portfolios and financial instruments caused by
  a change in market prices or rates.

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