Smart Contract Applications Across FinTech BFC Practice Questions (Page 6)

Questions 26–30

1. 26foundation · easy

   Which of the following best describes a common use of smart contracts in the insurance sector?

   • AGuaranteeing that insurance premiums are always refunded if no claim is made
   • BStoring all policy documents in an immutable ledger without any automated execution
   • CReplacing the need for underwriters in all insurance products
   • DAutomatically processing a claim payout when an oracle confirms a covered event, such as a flight delay
   Reveal Solution Discussion Select an answer first
2. 27foundation · easy

   Which of the following is a common approach to enable interoperability between smart contracts and existing financial infrastructure?

   • ARequiring all legacy systems to adopt the same blockchain protocol
   • BReplacing all legacy systems with blockchain immediately
   • CStoring all legacy data on the blockchain in its original format
   • DUsing middleware or APIs to translate data between the blockchain and legacy systems
   Reveal Solution Discussion Select an answer first
4. 28application · medium

   A regional bank wants to automate its letter-of-credit process for corporate clients. Currently, each transaction requires manual document checks and multiple confirmations between the bank, importer, and exporter. The bank wants to reduce processing time while keeping the existing SWIFT-based messaging for final settlement. Which approach best meets the requirement?

   • AUse a smart contract only to store hashes of shipping documents on-chain, while all validation and payment remain manual.
   • BImplement a smart contract that automatically releases payment to the exporter without any document verification.
   • CDeploy a smart contract on a permissioned blockchain that validates shipping documents against predefined rules and triggers payment instructions to the legacy SWIFT system.
   • DReplace the SWIFT system entirely with a public blockchain smart contract that handles both document validation and final settlement in cryptocurrency.
   Reveal Solution Discussion Select an answer first
5. 29foundation · easy

   What is a key challenge when integrating smart contracts with legacy financial systems?

   • ALegacy systems are always more secure than blockchain
   • BLegacy systems are too fast for blockchain to keep up
   • CData format and communication protocol differences between blockchain and legacy systems
   • DSmart contracts cannot process any data from external sources
   Reveal Solution Discussion Select an answer first
6. 30foundation · easy

   Why can oracle issues pose a risk to smart contracts?

   • ABecause oracles are a type of smart contract vulnerability that cannot be fixed
   • BBecause smart contracts rely on external data that may be inaccurate or manipulated
   • CBecause oracles are always centralized and therefore unreliable
   • DBecause oracles are only used for cryptocurrency price feeds
   Reveal Solution Discussion Select an answer first