Question 1

A company issues a share that has a par value of 100.00 and pays a fixed dividend of 2.0% annually? What type of share is this?

AOrdinary share

BCumulative share

CDeferred share

DPreference share

Answer : D

Question 2

When a rating agency is assessing a corporate bond rating/ which of the following will they take into consideration in giving their rating?

AThey assume all bonds will repay and so ignore the probability of default

BThey look at the severity of potential loss without considering the probability of default

CThey consider probability of default but must always assume 100% loss

DThey take into consideration both probability of default and specific severity of potential loss

Answer : D

Question 3

A spot FX trade would traditionally follow which of the following settlement conventions?

ASame day

BT + 1 day

CT + 2 days

DT + 3 days

Answer : C

Question 4

Which money market instrument is supported in the secondary market by primary dealers?

ADeposits

BCommercial paper

CT-bill

DCorporate bond

Answer : C

Question 5

You hold a call option on a stock with a strike of EUR 35. The current premium for this option is EUR 3.80 and the underlying stock is trading at EUR 32. How much of this option price represents time value?

ANone as the option is in-the-money

BEUR 3.80

CEUR 3.00

DEUR 0.80

Answer : B

Free Financial Markets Foundation Qualification Questions for ICMA Financial Markets Foundation Qualification Exam as PDF & Practice Test Software

Question 1

Question 2

Question 3

Question 4

Question 5