Blockchain Applications in Financial Services BFC Practice Questions (Page 8)

Questions 36–40

1. 36expert · hard

   A remittance company is evaluating blockchain solutions to reduce costs for low-value transfers. They have two options: a stablecoin on a public blockchain with low transaction fees but volatile network congestion, or a permissioned blockchain with predictable fees but higher operational costs. The company must ensure that transfers settle within 10 minutes 99.9% of the time. Which option is more appropriate?

   • APublic blockchain, because it has lower fees and is more decentralized.
   • BPermissioned blockchain with a single operator to minimize costs.
   • CPermissioned blockchain, because it offers predictable performance and fee stability, which is critical for meeting the SLA.
   • DPublic blockchain with a dynamic fee adjustment mechanism to prioritize transactions during congestion.
   Reveal Solution Discussion Select an answer first
2. 37foundation · easy

   What does 'fractional ownership' mean in the context of tokenizing a real-world asset like real estate?

   • AThe asset is leased to multiple tenants, and each tenant receives a token.
   • BThe property is divided into multiple legal titles, each registered on a blockchain.
   • CThe asset is owned by a single entity that issues tokens as debt obligations.
   • DInvestors can buy tokens that represent a portion of the asset's value, enabling smaller investments.
   Reveal Solution Discussion Select an answer first
4. 38foundation · easy

   In supply chain financing, what benefit does blockchain provide to a supplier seeking early payment of invoices?

   • AIt provides a transparent and verifiable record of the invoice and its approval, enabling faster financing decisions.
   • BIt guarantees that the supplier will receive the full invoice amount immediately.
   • CIt eliminates the need for the buyer to approve the invoice before payment.
   • DIt allows the supplier to create a new invoice on the blockchain without any verification.
   Reveal Solution Discussion Select an answer first
5. 39expert · hard

   A trade finance platform wants to reduce the time and cost of issuing letters of credit. They are considering a blockchain-based system that digitizes the entire process. However, they must integrate with existing bank systems that use different data standards and legacy protocols. The platform also needs to ensure that only authorized parties can access the letter of credit details. Which approach is most practical?

   • AReplace all legacy bank systems with new blockchain-native systems to avoid integration issues.
   • BUse a permissioned blockchain with an API gateway that translates between legacy bank formats and the blockchain data model.
   • CUse a public blockchain and rely on encryption to protect letter of credit details.
   • DUse a centralized database with blockchain-like audit trails to simplify integration.
   Reveal Solution Discussion Select an answer first
6. 40expert · hard

   A decentralized insurance platform uses smart contracts to automate payouts for crop insurance. The smart contract relies on weather data from a single oracle. After a severe drought, the oracle fails to report the data, and farmers do not receive payouts. The platform wants to improve reliability without significantly increasing costs. Which solution is most appropriate?

   • AAllow farmers to submit their own weather data to trigger payouts.
   • BUse multiple independent weather oracles and require a majority consensus to trigger payouts.
   • CSwitch to a centralized insurance model to avoid oracle dependency.
   • DKeep the single oracle but add a manual override process for exceptional cases.
   Reveal Solution Discussion Select an answer first