Smart Contract Applications Across FinTech BFC Practice Questions (Page 8)

Questions 36–40

1. 36application · medium

   A DeFi yield farming protocol is being audited. The audit team finds that the contract uses a price oracle that can be updated by any user. What is the most likely risk?

   • AAn attacker could manipulate the oracle price to exploit the yield calculation and drain funds.
   • BThe contract will automatically upgrade itself to a new version.
   • CThe contract will stop working because of a lack of gas.
   • DThe contract will become slower because of too many oracle updates.
   Reveal Solution Discussion Select an answer first
2. 37application · medium

   A supply chain finance company wants to automate invoice discounting for small suppliers. The process currently requires manual verification of invoices and payment terms. Which smart contract feature would most directly reduce manual intervention?

   • AA contract that stores invoice hashes on-chain but requires a human to approve each discount.
   • BA contract that only records the discount agreement and relies on the existing ERP system for payment.
   • CA contract that sends email notifications to suppliers but does not process payments.
   • DA contract that automatically verifies invoice data against purchase orders and releases payment when conditions are met.
   Reveal Solution Discussion Select an answer first
4. 38foundation · easy

   What is a key benefit of tokenizing an illiquid asset, such as real estate, using smart contracts?

   • ARemoving all regulatory requirements for trading the asset
   • BEliminating the need for any legal ownership records
   • CIncreased liquidity by allowing the asset to be traded in smaller units
   • DGuaranteeing that the asset value will never decrease
   Reveal Solution Discussion Select an answer first
5. 39application · medium

   A bank wants to use smart contracts to automate the settlement of interbank transfers. The bank's existing systems use ISO 20022 messaging standards. The bank needs to ensure that the smart contract can send and receive payment instructions in that format. Which approach is most appropriate?

   • AHave the smart contract directly parse ISO 20022 XML messages without any translation layer.
   • BRequire all banks to abandon ISO 20022 and use a proprietary blockchain format.
   • CUse a smart contract that only works with internal bank data and ignores external messaging standards.
   • DUse a middleware layer that converts ISO 20022 messages to smart contract calls and vice versa.
   Reveal Solution Discussion Select an answer first
6. 40application · medium

   A securities firm is tokenizing a bond issuance on a blockchain. The firm must ensure that only accredited investors can purchase the tokens, and it must report transactions to regulators. Which smart contract feature is essential?

   • AA smart contract that only records the initial sale but does not track secondary transfers.
   • BA public, permissionless smart contract that allows anyone to buy tokens without identity checks.
   • CA smart contract that relies on the token holders to self-certify their accredited status.
   • DA whitelist mechanism that restricts token transfers to verified accredited investors and records transactions for reporting.
   Reveal Solution Discussion Select an answer first