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Free ACI 3I0-012 Practice Exam with Questions & Answers | Set: 7

Questions 91

Is gambling or betting between market participants allowed?

Options:
A.

Yes, it is allowed for sporting events.

B.

Yes, it is allowed if no money is involved.

C.

Although not prohibited, it is strongly discouraged.

D.

It is allowed for purposes of charity.

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Questions 92

The seller of a floor:

Options:
A.

Receives compensation if a reference interest rate falls below an agreed level

B.

Pays compensation if a reference interest rate falls below an agreed level

C.

Receives compensation if a reference interest rate rises above an agreed level

D.

Pays compensation if a reference interest rate rises above an agreed level

Questions 93

Which of the following is a characteristic of all liquid assets under Basel III?

Options:
A.

uncertainty of valuation

B.

high correlation with risky assets

C.

listed on a developed and recognized exchange

D.

readily marketable

Questions 94

Clients of a voice-broker quote EUR/GBP at 0.8345-50, 0.8346-51, 0.8348-53 and 0.8349-53. What will be the broker’s price?

Options:
A.

0.8345-53

B.

0.8345-50

C.

0.8349-50

D.

0.8349-53

Questions 95

It is June. You are over-borrowed from October to January on your deposit book. How would you hedge using FRAs?

Options:
A.

Sell 3x6

B.

Buy 3x6

C.

Sell 4x7

D.

Buy 4x7

Questions 96

If spot GBP/CHF is quoted 1.4275-80 and the 3-month forward outright is 1.4254-61, what are the forward points?

Options:
A.

19/21

B.

2.1/1.9

C.

21/19

D.

0.21/0.19

Questions 97

What recommendation does the Model Code make to banks accepting a stop-loss order?

Options:
A.

The Model Code emphasizes the importance of clear, concise documentation and on-going lines of communication.

B.

Bank management must guarantee a fixed price execution to the counterparty.

C.

The Model Code recommends that only experienced dealers should be allowed to take such orders.

D.

Bank staff must secure the approval of the counterparty’s management to accept such orders.

Questions 98

What happens if an instruction remains unmatched and/or unsettled through CLS Bank?

Options:
A.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis.

B.

If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis.

C.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis.

D.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades.

Questions 99

An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:

Options:
A.

European-style option

B.

American-style option

C.

Bermudan option

D.

Asian option

Questions 100

The seller of a call option has:

Options:
A.

Substantial opportunity for gain and limited risk of loss

B.

Substantial risk of loss and substantial opportunity for gain

C.

Limited risk of loss and limited opportunity for gain

D.

Substantial risk of loss and limited opportunity for gain

Questions 101

The weighted average duration of liabilities can be increased by:

Options:
A.

buying additional 30-year German Government bonds

B.

selling futures contracts on 30-year German Government bonds

C.

buying futures contracts on 10-year German Government bonds

D.

exercising an early repayment option on a long-term senior borrowing

Questions 102

EUR/USD is 1.3080-83 and EUR/CHF is 1.2160-63. What price would you quote to a customer who wishes to sell CHF against USD?

Options:
A.

1.0759

B.

0.9299

C.

1.5909

D.

0.9295

Questions 103

What are the secondary market proceeds of a CD with a face value of EUR 5,000,000.00 and a coupon of 3% that was issued at par for 182 days and is now trading at 3% but with only 7 days remaining to maturity?

Options:
A.

EUR 4,997,085.03

B.

EUR 5,000,000.00

C.

EUR 5,071,086.45

D.

EUR 5,072,874.16

Questions 104

The gamma of an option is:

Options:
A.

The sensitivity of the option value to changes in volatility

B.

The sensitivity of the option value to changes in the time to expiry

C.

The sensitivity of the delta to changes in the value of the underlying

D.

The sensitivity of the option value to changes in the price of the underlying

Questions 105

What is interest rate immunization in the context of bank gap management?

Options:
A.

the strategy of holding more interest rate sensitive assets than interest rate sensitive liabilities

B.

the strategy of holding fewer interest rate sensitive assets than interest rate sensitive liabilities

C.

reducing the size of the balance sheet

D.

structuring a bank’s portfolio so that its net interest revenue and/or the market value of its portfolio will not be adversely affected by changes in interest rates