ACI 3I0-012 Exam Success: ACI Dealing Certificate Complete Study and Preparation Tips

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

exposure at origination, exposure at default and loss given default

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

exposure at origination, recovery rates and probability of default

liquidity risk

business risk

operational risk

funding risk

SONIA

STINA

STONIA

EONIA

ACT/365

ACT/360

ACT/ACT

30E/360

borrowing short and lending long

borrowing long and lending short

paying a higher rate on deposits than the market

increasing the banks leverage

he is unsure about the presence of a currency risk

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

his currency risk might change over time

the precise maturity of the currency risk is not known

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

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

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

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

LIBID

LIBOR

EURIBOR

EURO LIBOR

Buyer

Seller

Issuer

It depends on the agreement between the buyer and seller

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

matching processes are manual and may not be automated

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

confirmation matching should be a post-settlement workflow activity

Nothing, as he changed the terms of the deal

EUR 5,000,000.00

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

EUR 8,000,000.00

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

The high interest rate currency will depreciate

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

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

Collateralized Clearing Process

Central Clearing Counterparty

Collateralized Counterparty Protection

Collateralized Credit Protection

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

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

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

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

unchanged

15/13

10/8

6/4