Smart Contract Applications Across FinTech BFC Practice Questions (Page 4)

Questions 16–20

1. 16application · medium

   A real-estate investment firm wants to allow retail investors to buy fractional shares of commercial properties. They plan to issue digital tokens representing ownership. Which smart contract feature is most essential to ensure that token holders receive rental income proportionally?

   • AA contract that locks tokens for a fixed period and pays a fixed amount to the original purchaser regardless of token transfers.
   • BA contract that allows token holders to vote on property management decisions but does not handle income distribution.
   • CA contract that distributes rental payments automatically to token holders based on their current token balance at each distribution period.
   • DA contract that only records ownership transfers on-chain but requires a third-party administrator to calculate and send payments.
   Reveal Solution Discussion Select an answer first
2. 17foundation · easy

   Which of the following is a way smart contracts can support regulatory reporting?

   • ABy automatically generating and submitting transaction reports to regulators when thresholds are met
   • BBy encrypting all transactions so that regulators cannot access them
   • CBy storing reports only on the personal devices of users
   • DBy allowing each user to decide whether to report transactions
   Reveal Solution Discussion Select an answer first
4. 18application · medium

   A DeFi platform suffered a major loss because a smart contract vulnerability allowed an attacker to drain funds. The team is now planning a new version. Which practice is most important to prevent a recurrence?

   • ADeploy the contract quickly to be first to market, and fix issues later.
   • BRely on the community to report bugs after deployment without any prior testing.
   • CConduct multiple independent security audits and a bug bounty program before deployment.
   • DUse a complex contract with many features to maximize functionality, even if it is harder to audit.
   Reveal Solution Discussion Select an answer first
5. 19foundation · easy

   What is a limitation observed in some real-world smart contract implementations in insurance?

   • ADependence on reliable oracles to trigger payouts accurately
   • BSmart contracts are unable to handle any form of claims processing
   • CSmart contracts cannot be used for parametric insurance
   • DSmart contracts always increase the cost of insurance for consumers
   Reveal Solution Discussion Select an answer first
6. 20application · medium

   A DeFi lending protocol wants to automate collateral liquidation when a borrower's collateral value drops below a threshold. The protocol relies on an external price feed. Which design consideration is most critical to prevent incorrect liquidations?

   • AAllow the smart contract to use the last traded price from the protocol's own liquidity pool.
   • BUse a decentralized oracle that aggregates prices from multiple sources and includes a deviation threshold to avoid manipulation.
   • CUse a single centralized exchange's price feed for simplicity and lower latency.
   • DSet the liquidation threshold very low so that liquidations rarely occur, regardless of price feed accuracy.
   Reveal Solution Discussion Select an answer first