Ripple and XRP in Real-Time Cross-Border Trade Finance BBLC Practice Questions (Page 2)

Questions 6–10

1. 6foundation · easy

   Which compliance requirement is particularly relevant for financial institutions using Ripple and XRP?

   • AFood and Drug Administration (FDA) labeling requirements
   • BAnti-Money Laundering (AML) and Know Your Customer (KYC) regulations
   • CEnvironmental Protection Agency (EPA) emissions standards
   • DOccupational Safety and Health Administration (OSHA) workplace safety rules
   Reveal Solution Discussion Select an answer first
2. 7expert · hard

   A payment company wants to use XRP as a bridge currency for a new corridor. The company has two options: use ODL, which automatically sources XRP from exchanges, or manually buy and hold XRP in advance. The company is concerned about both price volatility and operational complexity. Which option is more appropriate and why?

   • AUse ODL but only for small transactions to avoid volatility risk.
   • BManually buy XRP and use a hedging strategy to lock in the exchange rate.
   • CUse ODL because it minimizes XRP holding time and reduces manual liquidity management.
   • DManually buy and hold XRP because it gives the company more control over the exchange rate.
   Reveal Solution Discussion Select an answer first
4. 8foundation · easy

   What is a key benefit of using XRP as a bridge currency compared to traditional currency corridors?

   • AIt requires a central authority to approve each transaction
   • BIt requires each bank to hold multiple fiat currencies in reserve
   • CIt allows settlement in seconds rather than days
   • DIt eliminates all foreign exchange risk
   Reveal Solution Discussion Select an answer first
5. 9application · medium

   A corporate treasurer is comparing two options for a high-value cross-border payment from the UK to Japan: (1) a traditional SWIFT correspondent banking chain and (2) RippleNet with ODL. The treasurer's key concern is the total cost of the transaction, including all fees and the cost of capital tied up in pre-funded accounts. Which statement accurately reflects the cost comparison between these two options?

   • ABoth options have identical costs because the underlying FX conversion and correspondent fees are the same regardless of the messaging network.
   • BSWIFT is always cheaper because XRP's price volatility adds a significant risk premium that outweighs any savings from eliminating nostro accounts.
   • CRippleNet with ODL has lower transaction fees but higher capital costs because the bank must hold XRP in reserve to ensure liquidity.
   • DRippleNet with ODL typically has lower total cost because it eliminates pre-funded nostro accounts and reduces the number of intermediary banks charging fees.
   Reveal Solution Discussion Select an answer first
6. 10foundation · easy

   How does Ripple and XRP benefit supply chain payments in trade finance?

   • ABy providing real-time settlement, reducing payment delays
   • BBy eliminating the need for contracts between parties
   • CBy providing insurance for shipped goods
   • DBy replacing all physical goods with digital tokens
   Reveal Solution Discussion Select an answer first