ICMA FMFQ Financial Markets Foundation Qualification Exam Exam Practice Test Questions

• Question 1

  Which of the following methods of raising funds will not be used by governments?

  • Direct borrowing from banks
  • Issuing bonds
  • Issuing short-term debt
  • Issuing equity

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• Question 2

  What is the credit spread on a corporate bond?

  • The increased size of the bid/ask spread in a trade price
  • The difference in price between a corporate bond and a benchmark treasury
  • The additional yield required by investors to offset the credit risk of the security
  • The difference between the coupon rate of a corporate bond and the dividend of the issuing company

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• Question 3

  Which of the following best describes LIBOR?

  • The average rate at which wholesale bank deposits have taken place over the past 24 hours (since the last LIBOR fix)
  • The average rate at which wholesale banks are offering one another money at fixing time
  • The highest rate at which wholesale banks are offering one another money at fixing time
  • The average rate at which wholesale banks have offered money to their customers over the past 24 hours (since the last LIBOR fix)

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• Question 4

  The borrowings of which of the following are most likely to be driven by regulatory capital requirements?

  • Banks
  • Corporates
  • Governments
  • Supra nationals

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• Question 5

  Which of the following currencies uses an Act/365 day-count in its money market transactions?

  • UDS
  • JPY
  • EUR
  • GBP

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