Blockchain Applications in Financial Services BFC Practice Questions (Page 3)

Questions 11–15

1. 11application · medium

   A developer is building a DeFi lending platform that allows users to deposit collateral and borrow stablecoins. The platform uses smart contracts to manage collateralization ratios and liquidations. The developer wants to minimize the risk of a flash loan attack that manipulates the price oracle. Which approach is most effective?

   • ADisable flash loans on the platform entirely to prevent oracle manipulation.
   • BAllow users to submit price updates directly to the smart contract.
   • CUse a decentralized price oracle that aggregates data from multiple independent sources.
   • DUse a single centralized price feed for simplicity and lower latency.
   Reveal Solution Discussion Select an answer first
2. 12application · medium

   A real estate investment firm wants to tokenize a commercial property to allow fractional ownership by retail investors. The firm must comply with securities regulations, which require that only accredited investors can purchase tokens and that the firm can enforce transfer restrictions. Which token design best meets these requirements?

   • AUse a private database to record ownership and issue tokens only as receipts.
   • BIssue utility tokens that represent a share of rental income but do not confer ownership rights.
   • CIssue security tokens with built-in transfer restrictions and whitelist accredited investor addresses.
   • DIssue tokens on a public blockchain with no transfer restrictions to maximize liquidity.
   Reveal Solution Discussion Select an answer first
4. 13application · medium

   An insurance company wants to automate crop insurance payouts based on weather data. They plan to use smart contracts. Which data source should the smart contract use to trigger payouts reliably?

   • AA single weather data API provided by the insurance company itself.
   • BA decentralized oracle network that aggregates data from multiple weather stations.
   • CManual claims submitted by farmers through a web portal.
   • DA random number generator to simulate weather conditions.
   Reveal Solution Discussion Select an answer first
5. 14application · medium

   A bank is planning to tokenize a portfolio of real estate assets for sale to retail investors. The bank must comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. Which feature should the tokenization platform include to meet these requirements?

   • AAnonymous token transfers to protect investor privacy.
   • BA feature that allows tokens to be transferred without any identity verification.
   • CA public blockchain with no access controls to ensure transparency.
   • DAutomated KYC/AML checks integrated into the token issuance and transfer process.
   Reveal Solution Discussion Select an answer first
6. 15foundation · easy

   What is a defining characteristic of a DeFi lending platform compared to a traditional bank loan?

   • AThe loan terms are set by a government regulatory body.
   • BAll loans are backed by the borrower's credit score and employment history.
   • CThe platform acts as a centralized intermediary that sets interest rates.
   • DBorrowers and lenders interact directly through smart contracts without a traditional bank intermediary.
   Reveal Solution Discussion Select an answer first