IIA-CFSA Exam Practice Test Instant Access

Question 1

End users need to hedge the prices at which they can purchase these commodities for instance:

AA University might want to lock in the price at which it purchases electricity to supply its air conditioning units for upcoming summer months

BAn airline wants to lock in the price of the jet fuel it needs to purchase in order to satisfy the peak in seasonal demand for travel

CA cotton producer wants to hedge his exposure to changes in the price of fertilizers or his end product (cotton)

DOnly A and B

Answer : D

Question 2

____________ swaps give companies extra flexibility to exploit their comparative advantage in their respective borrowing markets.

AFixed-floating swaps

BCurrency swaps

CInterest rate swaps

DNone of these

Answer : B

Question 3

General Market indices in the commodities market with which many people would be familiar include:

AGoldman Sachs Commodities Index (GSCI)

BCommodities Research board

CAcme Tool & Die

DBoth A&B

Answer : D

Question 4

Which of the following statements about the over-the-counter market is false?

AMutual funds and other new issues are initially issued over the counter

BSecurity prices are determined through auction bidding

CBroker dealers must be resigned

DSecurities are traded at many locations throughout the country

Answer : B

Question 5

An entity that purchases and sells securities on its own behalf is acting as:

AA broker

BA dealer

CAn agent

DA principal

Answer : B

Question 6

A gold producer wants to hedge his loses attributable to a fall in the price of gold for his current gold currency. This is an example of:

ACurrency Swaps

BCommodity Swaps

CInterests rate Swaps

DAll of these

Answer : B

Question 7

One of the largest components of the global derivative markets and natural adjunct to the fixed income markets is the:

AVolatility

BInterests rate Swaps

CCommodity Swaps

DBoth B & C

Answer : B

IIA Certified Financial Services Auditor CFSA Exam Practice Test