SAP Exam C_S4FTR_2023 Topic 5 Question 16 Discussion

Actual exam question for SAP's C_S4FTR_2023 exam

Question #: 16
Topic #: 5

[All C_S4FTR_2023 Questions]

You want to use the SOFR risk-free rate (RFR).For which product categories can parallel interest conditions be activated?Note: There are 2 correct answers to this question.

A600 - FX Transaction

B040 - Bonds

C540 - Cash Flow Transaction

D550 - Interest Rate Instrument

Show Suggested Answer

Suggested Answer: B, D

The product categories that can activate parallel interest conditions for using the SOFR risk-free rate (RFR) are 040 - Bonds and 550 - Interest Rate Instrument. SOFR is one of the alternative risk-free rates (RFRs) that are replacing LIBOR as a benchmark interest rate for financial transactions. Parallel interest conditions are interest conditions that use different interest calculation methods or interest rates for the same financial transaction. You can activate parallel interest conditions for product categories 040 - Bonds and 550 - Interest Rate Instrument by using parallel shifts of yield curves or lookback interest calculation methods.

by Harrison at Sep 18, 2024, 07:08 AM

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Tomas

10 months ago

Ooh, this one's a tough one. I'm gonna go with B) Bonds and C) Cash Flow Transaction. Though I have to admit, I'm a little curious about what a 'Cash Flow Transaction' even is. Sounds like some kind of financial voodoo to me!

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Anika

10 months ago

Easy peasy! The answer is obviously B) Bonds and D) Interest Rate Instrument. I mean, come on, SOFR and interest rates? It's like peanut butter and jelly - they just go together!

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Erasmo

8 months ago

Make sure to activate parallel interest conditions for Bonds and Interest Rate Instruments when using SOFR risk-free rate.

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Carman

8 months ago

SOFR and interest rates are definitely a perfect match, just like peanut butter and jelly!

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Alayna

8 months ago

It's important to understand which product categories are compatible with SOFR risk-free rate to ensure accurate calculations.

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Dottie

8 months ago

I agree, B) Bonds and D) Interest Rate Instrument are the correct categories for activating parallel interest conditions with SOFR.

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Winfred

10 months ago

Hmm, I'm leaning towards B) Bonds and D) Interest Rate Instrument. After all, SOFR is all about interest rates, so those choices seem like the logical picks.

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Lanie

10 months ago

This question is a tricky one! I'm pretty sure B) Bonds and C) Cash Flow Transaction are the right answers, but I'll have to double-check the details on SOFR.

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Gladis

9 months ago

C) 540 - Cash Flow Transaction

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Nu

9 months ago

B) 040 - Bonds

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Antonio

9 months ago

A) 600 - FX Transaction

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Caitlin

10 months ago

I'm not sure about this. Can someone explain why those categories are the correct ones for activating parallel interest conditions?

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Jesusita

11 months ago

I agree with Ryan. Using SOFR RFR for Bonds and Interest Rate Instruments makes sense.

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Nikita

11 months ago

I think the correct answers are B) Bonds and D) Interest Rate Instrument. SOFR is a benchmark for interest rates, so it makes sense to apply it to those product categories.

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