When the credit exposure is denominated in a currency different from the currency of the underlying exposure it is called_____________________________.

• A) Liability mismatch
• B) Security mismatch
• C) Maturity mismatch
• D) Currency mismatch

Collateral exposes the bank to _________________________.

• A) Market risk
• B) Operational risk
• C) All given options
• D) Legal risk

Which of the following recorded as an asset by the originating bank must also be treated as securitization exposures?

• A) Rights money
• B) Letter-of-credit
• C) Cash collateral accounts
• D) Deposit accounts

Which one of the following is not used as Credit risk mitigation (CRM) approach?

• A) The foundation IRB approach
• B) The advanced IRB approach
• C) The advanced standardizes approach
• D) The standardized approach

Banks are required to hold regulatory capital against all of their securitization exposures, including all of the following, EXCEPT:

• A) Extension of a liquidity facility or credit enhancement
• B) Investments in asset-backed securities
• C) Retention of a subordinated tranche
• D) The condition of liquidity risk to a securitization transaction

There are _______ of a rigorous process related to Key Principles of Supervisory Review.

• A) Two main features
• B) Three minor features
• C) Four main features
• D) Five main features

Which one of the following is not a mean of risk addressing?

• A) Increasing the credit
• B) Applying internal limits
• C) Strengthen risk management
• D) Improving internal control

In credit derivative ____________________ is specified by the parties to the agreement.

• A) Credit event
• B) Profit event
• C) Debit event
• D) Loss event

Who of the following clearly bears primary responsibility for ensuring that the bank has adequate capital to support its risks?

• A) Stock management
• B) Materials management
• C) Insurance management
• D) Bank management

In ____________________investors are paid out prior to the originally stated maturity of the securities issued.

• A) Credit enhancement
• B) Asset baked commercial paper
• C) None of the given options
• D) Clean up calls

Underlying instruments in the pool being securitized may include but are not restricted to all of the following, EXCEPT:

• A) Letter-of-credit
• B) Commitments
• C) Equity securities
• D) Corporate bonds

Securitization exposures, as described in Basel Accord, can include but are not restricted to all of the following, EXCEPT:

• A) Profitability rate
• B) Liquidity facilities
• C) Asset-backed securities
• D) Credit enhancements

Who will be responsible for slotting ECAIs assessments into the standardized risk weighting framework?

• A) Shareholders
• B) Board of directors
• C) ECAI
• D) Banking supervisors

Although the treatments of collateral, netting and credit derivatives and guarantees are based on similar concepts, which of the following are different?

• A) Quality weighting schemes
• B) Risk weighting schemes
• C) Explicit weighting schemes
• D) Temporal weighting schemes

____________________claim receives ______________ capital requirement

• A) Unsecured, higher
• B) Unsecured, lower
• C) Secured, higher
• D) Secured, lower

A ____________________ is an option that permits the securitization exposures to be called before all of the underlying exposures have been repaid.

• A) Credit enhancement interest-only strip
• B) Asset backed commercial paper
• C) Clean-up calls
• D) Credit enhancement

Added protection is provided by the bank to the parties to the exposures in __________________.

• A) Credit enhancement
• B) Early amortization
• C) Clean-up calls
• D) Asset based commercial paper

What does the acronym SPE stand for?

• A) Special purpose entity
• B) Society of petroleum entity
• C) Society for paralingual education
• D) Supple point extraction

A _____________________occurs when the residual maturity of a hedge is less than that of the underlying exposure.

• A) Maturity mismatch
• B) Currency mismatch
• C) Security mismatch
• D) Liability mismatch

Which of the following occurs when the residual maturity of a hedge is less than that of the underlying exposure?

• A) A hedging mismatch
• B) A currency mismatch
• C) A maturity mismatch
• D) Asset liability mismatch