Finastra Assessment Test Finastra Assessment Risk Management and Analytics 2

Question 1

What does 'stress testing' in banking refer to?

Accepted Answer

Simulating extreme but plausible scenarios to assess financial resilience

Answer

Bank stress testing involves modeling severe economic scenarios to evaluate whether an institution has sufficient capital to withstand adverse conditions.

Question 2

What is 'Expected Credit Loss' (ECL) under IFRS 9?

Accepted Answer

A forward-looking model estimating credit losses over the life of a financial instrument

Answer

IFRS 9 requires institutions to recognize ECL using a forward-looking approach that considers future economic conditions rather than only incurred losses.

Question 3

In market risk, what is 'Greeks' analysis used for?

Accepted Answer

Measuring sensitivity of options to various risk factors

Answer

Options Greeks such as Delta, Gamma, Vega, and Theta measure how an option's price responds to changes in underlying factors like price, volatility, and time.

Question 4

What is counterparty credit risk (CCR) in derivatives trading?

Accepted Answer

The risk that a trading counterparty defaults before final settlement

Answer

CCR is the risk that a counterparty in a derivative contract will default before the contract's settlement date, leaving the other party exposed.

Question 5

Which Finastra product supports market risk analytics and trading risk management?

Accepted Answer

Fusion Kondor

Answer

Fusion Kondor is Finastra's treasury and trading risk management platform used for managing market risk exposures across asset classes.

Finastra Assessment Test Practice Test

Finastra Assessment Test Practice Test

Finastra Assessment Test Finastra Assessment Risk Management and Analytics 2