FIA Financial Technology & Systems 4

Question 1

In financial systems, what is the primary function of a 'reconciliation' process?

Accepted Answer

To compare records from two or more sources to identify and resolve discrepancies

Answer

Reconciliation compares records across different systems (e.g., broker vs. custodian) to ensure they agree and to investigate any breaks.

Question 2

What is the T+2 settlement standard in US equity markets?

Accepted Answer

The final exchange of securities and cash occurs 2 business days after trade date

Answer

T+2 means the actual transfer of securities and payment is completed two business days after the trade is executed.

Question 3

Which type of database architecture is most commonly used by financial institutions for high-volume transaction processing systems?

Accepted Answer

Relational databases with ACID compliance

Answer

Relational databases with ACID (Atomicity, Consistency, Isolation, Durability) properties are preferred for financial transactions because they guarantee data integrity.

Question 4

In the context of financial technology, what does 'API-first' architecture mean?

Accepted Answer

Designing systems so that all functionality is accessible via APIs from the outset

Answer

API-first means designing and building APIs before other components so that all functionality can be consumed programmatically by any client.

Question 5

What is 'tokenization' in the context of payment security?

Accepted Answer

Replacing sensitive card data with a non-sensitive substitute value

Answer

Payment tokenization replaces sensitive card numbers with a unique token, so merchants never store actual card data, reducing breach risk.

(FIA) Financial Information Associate Certification Practice Test

(FIA) Financial Information Associate Certification Practice Test

FIA Financial Technology & Systems 4