FMS

Question 1

It is the price for one unit of the commodity. It is essentially the amount of currency that paid for 1 unit of the commodity currency.

Answer 1

Terms Currency

Question 2

FX contract wherein settlement is beyond spot value date. Exchange rate is determined by the current spot rate and interest rate differential of the two currencies involved

Answer 2

Forward rate

Question 3

It is the simultaneous purchase and sale of FX for different value dates (i.e. Spot + Forward)

Answer 3

Swap

Question 4

The FX forward contract is also known as what:

Answer 4

Deliverable forward or Plain- Vanilla Forward

Question 5

gives bondholders the right but not the obligation to sell their securities back to the issuer at a pre-determined price and date

Answer 5

Puttable (Put option)

Question 6

A derivative is a security whose price is dependent upon or derived from one or more

Answer 6

Underlying assets

Question 7

Develops solutions for trading and client requirements, enabling the business to deal in and/or offer a variety of financial products and services.

Answer 7

Product Management Division

Question 8

It is a structure that uses both an underlying bond and a Cross Currency Swap.

Answer 8

Asset Swap

Question 9

Handles peso and dollar funds generation through deposits and other investment products

Answer 9

Institutional Fixed Income Sales Division

Question 10

In an FX Swap, the first exchange is called what and where a spot rate is used.

Answer 10

Near Leg

Question 11

Who issues the Fixed-Rate Corporate Bonds (PHP)

Answer 11

Prime Domestic Corporations

Question 12

It is an agreement to buy/sell one currency against the other for settlement up to T+2

Answer 12

Spot

Question 13

It is a single currency plain vanilla IRS agreement wherein one party agrees to pay a series of fixed rate interest payment while
the other party pays a series of floating rate interest payment based on a notional principal.

Answer 13

Interest Rate Swap

Question 14

It is the amount borrowed and it is given back to the investor on maturity date at its maturity value.

Answer 14

Par Value/ Face Value

Question 15

It is just the future value of the spot rate, given current interest rates

Answer 15

Forward rate

Question 16

Who are the typical sellers of Foreign Exchange?

Answer 16

Exporters, BPOs, Remittance, OFWs

Question 17

What’s the formula of the swap points

Answer 17

Spot Rate x IRD x T/360

Question 18

Day-to-day potential for an investor to experience losses from fluctuations in foreign exchange and security prices.

Answer 18

Market Risk

Question 20

Who are under the primary markets

Answer 20

On the first issuance of:
1. Government
2. Corporations through IPOs

Question 21

It can be seen as a combination of the two swap contracts

Answer 21

Cross Currency Swap (CCS)

Question 22

Services corporate needs on foreign exchange requirements. Cross-sells other FX products and/or services to corporate clients, including forwards, swaps, and other derivative instruments.

Answer 22

Corporate & Commercial FX Sales Divisions

Question 23

What is the benefit of the Asset Swap (ASW)

Answer 23

Yield enhancement and portfolio investment diversification

Question 24

Minimum Investment amount for the T-Bills, RTBs, FXTns

Answer 24

Php 500,000 in par value

Question 25

Who are the buyers/holders of bonds?

Answer 25

Individuals, Corporations, or organizations

Question 26

How do you compute for the IRD or otherwise known as Interest Rate Differential

Answer 26

PHP interest rate- USD interest rate

Question 27

If the coupon rate is lesser than the market rate, the bond is:

Answer 27

At a DISCOUNT

Question 28

It is the selling rate of the bank

Answer 28

Offer rate

Question 29

In contrast to the plain vanilla IRS, a CCS involves the

Answer 29

The Exchange of the face amounts

Question 30

Is it the buying rate of the bank

Answer 30

Bid rate

Question 31

Handles distribution of domestic and foreign fixed income securities to corporate clients and financial institutions.

Answer 31

Institutional Fixed Income Sales Division

Question 32

Statistical estimate of the maximum potential loss in the value of the trading portfolio under normal market conditions, for a given time horizon and confidence level.

Answer 32

Value at Risk (VaR) – A tool to control trading losses

Question 33

Corporate or Government bonds through the second market can be obtained through:

Answer 33

1. Broker 2. Via Exchange 3. OTC

Question 34

It is merely a contract between two or more parties with its value determined by fluctuations in the underlying asset.

Answer 34

Derivative

Question 35

What's the T-Bills Interest Payment schedule

Answer 35

Discounted; par/nominal value payable on maturity date

Question 36

If the coupon rate greater than the market rate, the bond is:

Answer 36

At a PREMIUM

Question 37

What is the minimum investment for Fixed-Rate Corporate Bonds (USD)

Answer 37

Usually minimum trade lot is $200,000

Question 38

Handles distribution of domestic and foreign fixed income securities to retail clients thru the Bank’s branch network (RBB) and Wealth Management Group (WMG)

Answer 38

Treasury Retail Sales Division

Question 39

The second exchange is called what and it is where a forward rate is used.

Answer 39

Far-leg

Question 40

It is the currency that is being bought or sold

Answer 40

Commodity Currency

Question 41

It is an instrument of indebtedness of the bond issuer to the holders. It is a form of loan or IOU.

Answer 41

Bond

Question 42

It is a contract that simultaneously agrees to buy (or sell) an amount of currency at an agreed rate and to resell (or repurchase) the same amount of currency.

Answer 42

FX Swap

Question 43

Risk of principal or loss of a financial reward as a result of the failure of the borrower to repay a loan.

Answer 43

Credit Risk

Question 44

Who are the typical buyers of Foreign Currency?

Answer 44

Importers, Investors, and to pay USD loans

Question 45

Who are the issuers of the bonds?

Answer 45

Government and Corporations

Question 46

Leads the research and development of robust, effective market and macroeconomic views aimed at helping the Bank acclimate its strategies and/or operations with emerging market conditions, issues, and trends.

Answer 46

Economic and Markets Research Division

Question 47

occurs whenever a borrower is expecting future cash flows to pay a current debt.

Answer 47

Credit Risk

Question 48

It gives the bond issuer the right but not the obligation to redeem its issue of securities before the bond’s maturity. The issuer usually pays the bondholders a premium

Answer 48

Callable (Call Option)

Question 49

Sources fixed income securities via best execution for clients of Treasury Retail Sales and Institutional Fixed Income Sales

Answer 49

Broker Department

Question 50

Risk of loss attributable to people, processes, and systems.

Answer 50

Operational Risk

Question 51

It is a trading between the buyers and sellers.

Answer 51

Secondary Market

Question 52

How do treasury generate funds?

Answer 52

CASA, Time Deposit, LTNCD

Question 53

How does Treasury mainly works?

Answer 53

Funds Generation -> Monitoring -> Deployment/ Asset Generation

Question 54

It is an intermediation cost

Answer 54

Effective Cost

Question 55

How much is the rate for the short term products for CA/SA, Short-term products; 5 years

Answer 55

CA/SA- No DST Short-term products- 0.0075 5-Year Products- 0.0015

Question 56

What is the RR (Reserve Requirement) for universal and commercial banks effective June 30, 2023

Answer 56

9.5%

Question 57

Under Liquidity Management, give at least 3 funding options.

Answer 57

1. Corporate Market 2. Repo with other banks 2. Interbank Market

Question 58

It is the Lender of Last Resort

Answer 58

BSP

Question 59

Bank pays both principal and interest (i = prt) at maturity date

Answer 59

Time Deposit

Question 60

Possesses similar characteristics with that of a time deposit, but negotiable

Answer 60

Certification of Deposit

Question 61

Entity lending the cash/ buying the security (collateral)

Answer 61

Buyer (Reverse Repo)

Question 62

Entity borrowing cash and selling the security (collateral)

Answer 62

Seller (Repo)

Question 63

It short-term, unsecured, negotiable, and issued at a discount. It is usually issued by companies with good credit ratings

Answer 63

Commercial Paper

Question 64

Differs from a fixed-rate bond as interest is variably linked to a financial index adjusted periodically.

Answer 64

Floating Rates Notes

Question 65

An obligation on the part of the issuer to pay its investors the interest (e.g. quarterly, semi-annual) and principal at maturity

Answer 65

Fixed-Rate Bonds

Question 66

A bond is also a form of what:

Answer 66

Loan or IOU

Question 67

In CBC, who issues or underwrites Corporate Bonds

Answer 67

China Bank Capital Corp.

Question 68

Days counted from last coupon date up to the value date

Answer 68

Accrued Days

Question 69

What are the common underlying assets:

Answer 69

1. Stocks 2. Bonds 3. Currencies 4. Interest Rates 5. Market Indexes

Question 70

Hedging tool allows client to _______ the price today for currency that is to be _________ or _________ for settlement in the future.

Answer 70

Lock in; Bought or Sold

Question 71

Cross-sells various financial products to both retail and institutional clients of the Bank catering to their investment and hedging needs.

Answer 71

Market Sales Group

Question 72

What is the term of T-Bills?

Answer 72

91 days; 182 days; 364 days