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Free ACI 3I0-012 Practice Exam with Questions & Answers | Set: 15

Questions 211

Lending for 3 months and borrowing for 6 months creates a 3x6 forward-forward deposit. The cost of that deposit is called:

Options:
A.

Break-even rate

B.

Implied rate

C.

Forward-forward rate

D.

All of the above

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Questions 212

The two-week repo rate br the 5.25% bund 2007 is quoted to you at 3.33-38%. You agree to reverse in bonds worth EUR 266,125,000 with no initial margin. You would earn repo interest ot

Options:
A.

EUR 349,806

B.

EUR 344,632

C.

EUR 319,315

D.

EUR 324,110

Questions 213

One of your brokers asks you to buy and sell EUR/USD at the same price net of brokerage in order to allow him to clear a transaction.

Options:
A.

You must have prior senior management approval.

B.

You must have the authoritq to switch names.

C.

You must execute such transactions as promptly as possible within policy guidelines

D.

All of the above.

Questions 214

When quoting the exchange rate between the EUR and AUDI which is conventionally the base currency?

Options:
A.

EUR

B.

AUD

C.

Depends on whether the price is being quoted in Europe or Australia

D.

Depends on whether the price is being quoted interbank or to a customer

Questions 215

The organisational structure of market participants should ensure a strict segregation between front and back office of:

Options:
A.

Duties and reporting lines.

B.

Systems.

C.

Career paths.

D.

All of the above.

Questions 216

What is a master agreement intended to do?

Options:
A.

Describe the parameters of a dealing relationship

B.

Set out the rights and obligations of two parties

C.

Apply to all transactions between two parties

D.

All of the above

Questions 217

When a stop-loss/profit order is taken, the rate specified in the order:

Options:
A.

Must be transacted regardless of where the market moved.

B.

Must be transacted if a broker confirms that the rate specified was reached.

C.

Cannot be taken as a fixed-price guarantee.

D.

None of the above.

Questions 218

What is meant by “short dates”?

Options:
A.

Maturities of less than one week.

B.

Maturities of less than one month.

C.

Maturities of less than one year.

D.

Maturities in the same calendar month.

Questions 219

You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity. 6-month LIBOR for the next payment date is fixed today at 4.95%. How would you hedge the swap using FRAs? How to hedge an IRS with a strip of FRAs?

Options:
A.

buy a strip of 0x6, 6x12, 12x18 and 18x24 FRAs

B.

sell a strip of 0x6, 6x12, 12x18 and 18x24 FRAs

C.

buy a strip of 6x12, 12x10 and 16x24 FRAs

D.

sell a strip of 6x12, 12x18 and 18x24 FRAs

Questions 220

You are quoted the following market rates:

spot EUR/USD. 1.2250

3M (91-day) EUR 2.55%

3M (91-day) USD. 2.00%

What is 3-month EUR/USD?

Options:
A.

1.2232

B.

1.2233

C.

1.2234

D.

1.2267

Questions 221

When is interest conventionally due on a 3-year interbank eurodollar deposit?

Options:
A.

At maturity

B.

Annually

C.

Semi-annually

D.

Quarterly

Questions 222

What is Model Codes recommendation on the settlement of dirrerences by “points”?

Options:
A.

It is not favoured.

B.

It may be permitted when allowed by the local market regulator.

C.

Itis unconditionally accepted bythe Code.

D.

It is allowed only if senior management approval is obtained.