Finastra Assessment Test Finastra Assessment Treasury and Capital Markets 2

Question 1

In Finastra's Treasury management system, what does 'netting' primarily refer to?

Accepted Answer

Combining multiple bilateral exposures into a single net position to reduce settlement risk

Answer

Netting consolidates multiple obligations between parties into one net amount, reducing settlement risk and operational overhead.

Question 2

Which yield curve construction method is most commonly used in Finastra's capital markets pricing for short-term instruments?

Accepted Answer

Bootstrap method using market instruments

Answer

The bootstrap method derives zero-coupon rates sequentially from liquid market instruments such as deposits, futures, and swaps.

Question 3

What is a 'quanto' derivative in capital markets?

Accepted Answer

A derivative where the underlying is in one currency but settled in another at a fixed exchange rate

Answer

A quanto eliminates foreign exchange risk by fixing the exchange rate, so the payoff is denominated in a different currency than the underlying asset.

Question 4

In the context of Finastra's Kondor+ / Fusion Capital, what is the role of a 'deal blotter'?

Accepted Answer

A real-time log of all trades entered during the trading session

Answer

The deal blotter provides traders with a real-time view of all transactions booked during the current session.

Question 5

A bank holds a 5-year fixed-rate bond funded by floating-rate liabilities. Which Finastra Treasury tool is most appropriate to hedge this exposure?

Accepted Answer

A pay-fixed, receive-floating interest rate swap

Answer

A pay-fixed, receive-floating IRS converts the fixed cash flows from the bond into floating payments that match the funding cost.

Finastra Assessment Test Practice Test

Finastra Assessment Test Practice Test

Finastra Assessment Test Finastra Assessment Treasury and Capital Markets 2