Which of the following regarding Orange County is FALSE?

• A.Bob Citron tried to "ride the yield curve"
• B.Citron's losses were eventually exposed by massive margin calls
• C.Bob Citron heavily leveraged his positions using repos
• D.Bob Citron engaged in risky strategies to benefit personally

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Finite insurance is reinsurance which

• A.transfers only a limited amount of risk at the usual reinsurance price
• B.transfers the total risk at the usual reinsurance price
• C.transfers the total risk at less cost than traditional reinsurance
• D.transfers only a limited amount of risk at less cost than traditional reinsurance

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Select the one correct statement relative to Barings Bank.

• A.Proprietary and agency trading were combined and therefore did not increase risk.
• B.Proprietary and agency trading were separate and therefore did not increase risk.
• C.Proprietary and agency trading were separate and did increase risk.
• D.Proprietary and agency trading were combined and therefore did increase risk.

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According to the Group of 30 Report, important risks associated with dynamic hedging are:

• A.Greater volatility than expected over the life of an option
• B.Neither A nor B
• C.Sudden gaps in market prices
• D.Both A and B

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Employees shall be remunerated adequately for the roles that they perform, where 'adequately' is defined

• A.using the risk reward profile for each business line in the organization
• B.as being the market norm for similarly situated personnel in competitive organizations
• C.as commensurate with policies to attract and retain high income / revenue earners
• D.using external references and benchmarks, and in a framework which is consistent with the type of risk-taking behavior expected of employees

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