04. ICB M02 Quiz

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Question 1 of 10

1. Question

How do Banks access payment systems of a foreign country?

A : Banks send payments to the clearing systems of that country like the local banks.

B : Banks open an account with a local bank in that country and use it to send and receive funds in local currency.

C : Banks request approval to access payment systems to the central bank of that country.

D : All the three other answers.

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Question 2 of 10

2. Question

Select correct statements about correspondent accounts.

A : Cash never moves out of a country.

B : Like individuals and corporations open bank accounts to send and receive funds, Banks do the same to send and receive funds in a foreign currency. They become customers of banks located in a foreign country.

C : The accounts opened in the foreign country are called correspondent accounts.

D : End parties cannot have bank accounts in the currency of another monetary zone than where they live.

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Question 3 of 10

3. Question

Two banks Bank A and Bank B are in an account relationship where Bank A has opened an account N with Bank B. How would Bank C that is not part of the relationship call the account N?

A : Nostro account

B : Vostro account

C : Loro account

D : Mirror account

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Question 4 of 10

4. Question

You are a bank employee. How would you define a Nostro account?

A : The account of my bank with other Banks

B : The account of other banks with my bank

C : The account of other banks among themselves

D : The account of end parties in the book of my banks

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Question 5 of 10

5. Question

You work for Bank A. Bank B located in a foreign country has opened the account K with Bank A. Bank A has opened the account L with Bank C. Bank D has opened the account M with Bank C. How would Bank A call the account K?

A : Nostro account

B : Vostro account

C : Loro account

D : Correspondent account

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Question 6 of 10

6. Question

Which are the correct statements about reconciliation?

A : A bank and its correspondent use the same references in the entries posted on nostro and mirror accounts to facilitate reconciliation.

B : Reconciliation consists in checking that each entry posted on the nostro account is justified.

C : In general, Banks perform the reconciliation of a Nostro account once a month.

D : Reconciliation is performed by both the bank and its correspondent.

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Question 7 of 10

7. Question

A US Bank has a Nostro account with a Bank in the Euro area. Funds kept on a Nostro account are of different categories. Indicate the correct ones among the following.

A : Vault cash used by the bank for customers exchanging local currencies against foreign currencies.

B : Funds of corporate customers that have a EUR account with the US Bank.

C : Funds owned by the US bank and used for its own operations.

D : Funds of private customers that have a EUR account with the US Bank.

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Question 8 of 10

8. Question

How are nostro accounts affected for customer transfers?

A : The nostro account is debited when the customer instructs the bank to make a transfer in currency.

B : The nostro account is credited when the customer instructs the bank to make a transfer in currency.

C : The nostro account is credited when the customer receives funds in currency for a credit of a customer.

D : The nostro account is debited when the customer receives funds in currency for a credit of a customer.

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Question 9 of 10

9. Question

How would you define the correspondent network of a bank?

A : The total number of accounts that a bank has opened for foreign banks.

B : The total number of entities that a bank has partnered with in foreign countries.

C : The total number of subsidiaries that a bank has in foreign countries.

D : The total number of currency accounts that a bank possesses in the different currency zones.

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Question 10 of 10

10. Question

How does a bank usually make a direct deposit when it opens a nostro account?

A : The bank must send one of its employees to the foreign country to make the direct deposit.

B : The bank goes to the FX market, makes a deal to buy the foreign currency in exchange of the local currency and indicates the Nostro account as beneficiary account.

C : The bank requests the correspondent to grant a loan that it will repay later after making money.

D : The bank instructs its correspondent to debit a nostro account it already has in that country and credit the new account with the other bank.

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