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Free ACI 3I0-012 Practice Exam with Questions & Answers | Set: 8

Questions 106

The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75- 80%. As collateral, you are offered EUR 25,000,000.00 nominal of the 5.5% OAT April 2012, which is worth EUR 28,137,500.00.

The Repurchase Price is:

Options:
A.

EUR 28,228,360.69

B.

EUR 28,229,572.15

C.

EUR 25,080,729.18

D.

EUR 25,081,805.55

ACI 3I0-012 Premium Access
Questions 107

You are quoted the following market rates:

Spot AUD/CAD 1.0600

12M (360-day) AUD 3.40%

12M (360-day) CAD 1.55%

What are the 12-month AUD/CAD forward points?

Options:
A.

+190

B.

-193

C.

-192

D.

-190

Questions 108

In the international market, a FRA in USD is usually settled with reference to:

Options:
A.

BBA LIBOR

B.

Fed funds

C.

ISDALIBOR

D.

EURIBOR

Questions 109

Experience has shown that recourse to taped telephone conversations proves invaluable to the speedy resolution of disputes. Therefore, the Model Code recommends:

Options:
A.

that all telephone conversations (internal and external) be taped without informing counterparties

B.

that only conversations undertaken by dealers and brokers should be recorded

C.

that all conversations undertaken by dealers and brokers should be recorded, together with back office telephone lines used by those responsible for confirming deals or passing payments to other institutions

D.

that only telephone conversations between dealers and brokers be recorded

Questions 110

Which of the following correctly states the Model Code’s recommendations regarding electronic trading and broking?

Options:
A.

Liquidity providers should be cognizant of reputational risks when supplying liquidity for onward third party consumption.

B.

Market participants must not seek information as to the legal status of a potential counterparty before allocating credit or trading status.

C.

Transactions should be handled in accordance with the regulator’s dealing rule book.

D.

Access to systems internally and at the client interface must be strictly controlled by the dealers.

Questions 111

A 6-month SEK/NOK Swap is quoted 40/50. Spot is 1.1145. Which of the following statements is correct?

Options:
A.

SEK interest rates are higher than NOK interest rates

B.

NOK interest rates are higher than SEK interest rates

C.

NOK interest rates are higher than USD interest rates

D.

SEK interest rates and NOK interest rates are converging

Questions 112

In interbank trading, if a dealer is calling “off” at the same time as the broker is hitting a price:

Options:
A.

no transaction should be concluded and the broker should inform both counterparties accordingly

B.

a transaction should be concluded and the broker should inform both counterparties accordingly

C.

the dealer has the choice of either concluding the transaction or not

D.

the broker decides whether the transaction should be concluded or not

Questions 113

You are quoted spot USD/NOK 5.7220-28 and USD/SEK 6.3850-58, at what price can you buy NOK against SEK?

Options:
A.

0.8963

B.

1.1157

C.

1.1159

D.

1.1160

Questions 114

An Overnight Indexed Swap (OIS) is:

Options:
A.

A fixed-floating money market swap in which the floating rate is an overnight index fixed periodically over the term of the swap

B.

A fixed-floating money market swap in which the floating rate is the mean of the overnight index over the term of the swap

C.

A fixed-floating money market swap in which the floating rate is an overnight index compounded daily

D.

A floating-for-floating rate swap in different currencies in which both floating rates are overnight indexes compounded daily

Questions 115

An option premium is normally a positive function of:

Options:
A.

the traded volume

B.

the historical volatility of the price of the underlying commodity

C.

the style (European or American) of the option

D.

the implied volatility of the price of the underlying

Questions 116

What does the Model Code recommend regarding “entertainment and gifts”?

Options:
A.

Management should monitor the form, frequency and cost of entertainment and gifts dealers receive, have a clearly articulated policy towards the giving/receipt of gifts and ensure the policy is enforced.

B.

As gifts and entertainment may be offered in the normal course of business, employees can offer inducements to conduct business and solicit them from the personnel of other institutions.

C.

Although management should not monitor the form, frequency or cost of entertainment/gifts dealers receive, they may have a policy towards the giving/receipt of gifts and ensure the policy is enforced.

D.

Gifts or entertainment should never be offered in the normal course of business, and employees must never offer any inducements to conduct business, nor solicit them from other institutions.

Questions 117

In which type of repo is “double dipping” a risk?

Options:
A.

Delivery repo

B.

HIC repo

C.

To-party repo

D.

“Double dipping” is never a risk in any type of repo

Questions 118

Which one of the following is a major objective of ACI-The Financial Markets Association?

Options:
A.

to promote globalization and deregulation of the financial markets

B.

to maintain the professional level of competence and to disseminate a high level of ethical and professional behavior

C.

to act as the official international market regulator in the absence of government regulation

D.

to become the sole global corporation of wholesale financial market professionals

Questions 119

If you sell USD 3-month forward to a client against EUR, what should you do to hedge your position?

Options:
A.

Buy a 3-month EUR/USD outright forward

B.

Buy USD spot, and sell and buy a 3-month EUR/USD FX swap

C.

Sell EUR/USD in the spot market, lend EUR for 3 months and borrow USD for 3 months

D.

Sell EUR/USD in the spot market, borrow EUR for 3 months and lend USD for 3 months

Questions 120

Repo is said to have “double indemnity” due to the creditworthiness of the counterparty and:

Options:
A.

A written legal agreement between the parties

B.

The oversight of the transaction by the custodian of the collateral

C.

The creditworthiness of the collateral

D.

The right of close-out and set-off in an event of default