Q. A bank may require collateral to limit its exposure to:

1. credit risk.
2. market risk.
3. compliance risk.

Q. A bond manager uses the S&P 500 Index as a performance benchmark. The managers benchmark violates the criterion of:

1. clarity.
2. investability.
3. compatibility.

Q. One of the functions of internal auditors in the risk management process is to:

1. identify key risk measures.
2. establish internal risk limits.
3. advise on how to improve risk management, controls, and efficiency.

Q. One of the properties of key risk measures is that they:

1. are consistent among industries.
2. give warnings when risk levels are rising.
3. limit the amount of risky securities that can be held.

Q. Which of the following economic measures will most likely increase as a result of a general increase in the price of goods produced in a country?

1. Real GDP
2. Nominal GDP
3. Constant dollar GDP

Q. Protecting consumers of financial products from abusive practices is a goal of:

1. regulation.
2. fiscal policy.
3. capital markets.

Q. Higher level executives of an investment firm can be disciplined for the regulatory violations of lower level employees:

1. by monetary fines only.
2. due to failure to properly supervise.
3. only when criminal conduct is involved.

Q. A property of a document is that it:

1. is always standardised.
2. represents an official record.
3. exists only in written or printed form.

Q. Letters, memos and emails are best described as examples of:

1. policy documents.
2. ad hoc documents.
3. standardised documents.