Finastra Assessment Test Finastra Assessment Treasury and Capital Markets 3

Question 1

In Finastra's FX trading module, what distinguishes a 'Tom-Next' swap from a standard spot transaction?

Accepted Answer

Tom-Next rolls a position from tomorrow to the next business day, while spot settles T+2

Answer

A Tom-Next swap is used to roll a position maturing tomorrow (T+1) forward to the next business day (T+2), effectively extending the settlement date.

Question 2

Which risk metric does Finastra's Fusion Risk use to capture the potential loss from simultaneous default of a counterparty and adverse market movement?

Accepted Answer

Wrong-Way Risk (WWR)

Answer

Wrong-Way Risk arises when counterparty exposure increases at the same time as the counterparty's credit quality deteriorates, compounding potential loss.

Question 3

In capital markets, a 'reverse repo' transaction from the perspective of the cash provider means:

Accepted Answer

The cash provider buys securities and agrees to resell them at a specified future price

Answer

In a reverse repo, the cash provider purchases securities temporarily, earning the repo rate, and returns them at maturity at a pre-agreed price.

Question 4

Finastra's Fusion Treasury uses 'shadow accounting' primarily to:

Accepted Answer

Mirror ledger postings in a secondary ledger for parallel reporting or IFRS 9 compliance

Answer

Shadow accounting runs a parallel ledger that mirrors the primary accounting entries, enabling dual reporting under different standards such as GAAP and IFRS 9.

Question 5

What is the primary purpose of a 'collateral optimization' engine within Finastra's securities finance module?

Accepted Answer

To allocate the cheapest eligible collateral across obligations while meeting all eligibility criteria

Answer

Collateral optimization selects the least expensive eligible assets to post as collateral, reducing the cost of funding and freeing up high-quality liquid assets.

Finastra Assessment Test Practice Test

Finastra Assessment Test Practice Test

Finastra Assessment Test Finastra Assessment Treasury and Capital Markets 3