Smart Contracts for Finance BFC Practice Questions (Page 3)

Questions 11–15

1. 11foundation · easy

   In the lifecycle of a smart contract used for a bond payment, what does 'termination' typically involve?

   • ARemoving the contract from the blockchain and releasing any remaining funds
   • BUpgrading the contract to a new version
   • CPausing the contract temporarily for maintenance
   • DArchiving the contract data to an external database
   Reveal Solution Discussion Select an answer first
2. 12application · medium

   A startup is creating a smart contract for a subscription-based content service. The contract should automatically renew a user's subscription if they have sufficient balance, and terminate if they do not. Which lifecycle feature is essential to implement this behavior?

   • AA function that allows the user to cancel at any time, but no automatic renewal.
   • BA manual admin function that the service provider calls to renew or terminate each subscription.
   • CA time-based trigger that checks the user's balance and executes the renewal or termination logic at the end of each period.
   • DA random number generator that decides whether to renew the subscription.
   Reveal Solution Discussion Select an answer first
4. 13application · medium

   An insurance company wants to automate claims processing for crop insurance. The smart contract should pay out when weather data indicates a drought. The company is concerned about the reliability of the weather data source. Which approach best addresses this concern?

   • AHave the insurance company manually verify each claim before the smart contract pays out.
   • BRely on a single national weather service API as the sole data source.
   • CLet the smart contract read weather data directly from the internet without an oracle.
   • DUse a decentralized oracle network that aggregates data from multiple weather stations and provides a tamper-resistant feed.
   Reveal Solution Discussion Select an answer first
5. 14application · medium

   A financial institution is planning to deploy a smart contract for automated dividend distribution to shareholders. The institution operates in a jurisdiction that requires shareholder records to be kept confidential. Which design best addresses this regulatory constraint?

   • AAvoid using a smart contract and manually distribute dividends to protect confidentiality.
   • BPublish all shareholder names and addresses on-chain to ensure transparency.
   • CUse a private blockchain with permissioned access, but still store shareholder names in the contract.
   • DStore shareholder identities off-chain and use the smart contract to distribute dividends to pseudonymous addresses.
   Reveal Solution Discussion Select an answer first
6. 15foundation · easy

   Which of the following is a common financial use case for smart contracts?

   • AManual reconciliation of bank statements at the end of each month
   • BStoring physical gold certificates in a bank vault
   • CPrinting and mailing paper invoices to customers
   • DAutomated insurance claim payouts when verifiable conditions are met
   Reveal Solution Discussion Select an answer first