New Year Special 60% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: bestdeal

Free ACI 3I0-012 Practice Exam with Questions & Answers | Set: 9

Questions 121

Under Basel rules, expected credit loss is a function of which of the following sets of parameters:

Options:
A.

1 minus recovery rate, probability of default and exposure at default

B.

exposure at origination, exposure at default and loss given default

C.

loss given default, 1 minus recovery rate and exposure at default

D.

exposure at origination, recovery rates and probability of default

ACI 3I0-012 Premium Access
Questions 122

Under Basel Rules, the Basic Indicator Approach is a regulatory framework for:

Options:
A.

liquidity risk

B.

business risk

C.

operational risk

D.

funding risk

Questions 123

What is the Overnight Index for GBP?

Options:
A.

SONIA

B.

STINA

C.

STONIA

D.

EONIA

Questions 124

Which is the day count/annual basis convention for SGD money market deposits?

Options:
A.

ACT/365

B.

ACT/360

C.

ACT/ACT

D.

30E/360

Questions 125

If the yield curve is upward sloping, a bank would not profit from:

Options:
A.

borrowing short and lending long

B.

borrowing long and lending short

C.

paying a higher rate on deposits than the market

D.

increasing the banks leverage

Questions 126

A customer would hedge a currency exposure with a forward FX time option if:

Options:
A.

he is unsure about the presence of a currency risk

B.

the amount of the currency risk is not precisely known in advance

C.

his currency risk might change over time

D.

the precise maturity of the currency risk is not known

Questions 127

Which of the following statements about requirements for limit setting is correct?

Options:
A.

In the case of trading transactions, counterparty limits are to be set by the front office and issuer limits are to be set by the back office

B.

In the case of trading transactions, counterparty and issuer limits are to be set by the credit committee

C.

In the case of trading transactions, counterparty limits are to be set by a front office vote and market risk limits are to be set by the back office

D.

In the case of trading transactions, counterparty limits and issuer limits are to be set by the front office

Questions 128

Which of the following is not an officially published settlement or reference rate?

Options:
A.

LIBID

B.

LIBOR

C.

EURIBOR

D.

EURO LIBOR

Questions 129

If the issuer of the collateral used in a repo defaults during the term of the transaction, who suffers the loss?

Options:
A.

Buyer

B.

Seller

C.

Issuer

D.

It depends on the agreement between the buyer and seller

Questions 130

In trade confirmation, which one of the following statements about “matching” is correct?

Options:
A.

matching should be performed by no later than the day after trading day

B.

matching processes are manual and may not be automated

C.

matching should be performed as soon as possible upon receipt of the confirmation

D.

confirmation matching should be a post-settlement workflow activity

Questions 131

You quote spot EUR/USD at 1.3023-26 in 5 to another bank. He says, “Take 5, could do 8”.

How much are you obliged to do?

Options:
A.

Nothing, as he changed the terms of the deal

B.

EUR 5,000,000.00

C.

More than EUR 5,000,000.00, but a maximum of EUR 8,000,000.00

D.

EUR 8,000,000.00

Questions 132

The Interest Rate Parity Theorem should work because, when one sells a low interest rate currency to invest in a high interest rate currency and hedges the currency risk:

Options:
A.

The cost of hedging is given by the forward points, which are equal to the interest rate differential between the two currencies

B.

The high interest rate currency will depreciate

C.

The profit from the appreciation of the high interest rate currency has been hedged away

D.

Interest rates are mean reverting, which means the low interest rate will tend to rise and the high interest rate will tend to fall

Questions 133

What is the meaning of CCP within the Basel framework?

Options:
A.

Collateralized Clearing Process

B.

Central Clearing Counterparty

C.

Collateralized Counterparty Protection

D.

Collateralized Credit Protection

Questions 134

The Liquidity Coverage Ratio imposed by Basel III requires a bank:

Options:
A.

to keep enough highly liquid assets to cover its net liabilities for the next 10 days to guard against severe liquidity stress

B.

to keep enough highly liquid assets to cover its net liabilities for the next 30 days to guard against severe liquidity stress

C.

to keep enough highly liquid assets to cover its net liabilities for the next 60 days to guard against severe liquidity stress

D.

to retain enough liquidity to cover its assets against severe default risk

Questions 135

3-month USD/CHF is quoted at 12/10. Interest rates in Switzerland are reduced but USD rates (which are higher) are unchanged. What would you expect the 3-month forward USD/CHF rate to be?

Options:
A.

unchanged

B.

15/13

C.

10/8

D.

6/4