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

usually the current spot EUR/USD mid-market rate

commonly the prevailing 4-month forward EUR/USD mid-rate

always the forward EUR/USD bid rate of the first swap leg

generally the prevailing 2-month forward EUR/USD mid-rate

At that price

At that price in a marketable amount

At that price in a marketable amount, provided the counterparty’s name is acceptable

At that price in a marketable amount, provided the counterparty’s name is acceptable and the market price has not moved excessively

-30

+29

-29

+30

quarterly tests I updates as needed

at least every second year

half-yearly tests / yearly updates

at least yearly

The 3-month EURODOLLAR futures contract has a basis point value of USD 50.00 and a face value of USD 1,000,000.00

The 3-month EURIBOR futures contract has a a basis point value of EUR 12.50 and a face value of EUR 500,000.00

The 3-month Sterling (SHORT STERLING) futures contract has a a basis point value of GBP 12.50 and a face value of GBP 500,000.00

The 3-month Euro Swiss Franc (EUROSWISS) futures contract has a a basis point value of CHF 50.00 and a face value of CHF 2,000,000.00

When setting the rates for an FX swap to extend the maturity, the spot rate should be fixed immediately within the current spread

Where the use of non-current rates may be necessary, they should only be entered into with the prior explicit permission of the quoting party’s senior management

Dealing and rollovers at non-current rates are relatively common market practice and therefore should not be treated differently from any other transaction

Dealing and rollovers at non-current rates are forbidden as they can help perpetrate fraud and tax evasion

a term the quoting dealer uses to caution the receiver of the quote that the price may have to be re-quoted at the receiver’s risk

the qualification that the rate quoted in the market may no longer be valid and requires confirmation before any trades can be agreed upon

the statement that the rates quoted by the broker are for indication only

an acknowledgement by the dealer receiving the quote that the rate may have to be re-quoted at the receiver’s risk

You pay CAD 20,000.00

You receive CAD 20,000.00

You pay CAD 19,952.61

You receive CAD 19,952.61

0.300%

0.946%

1.935%

1.835%

4.19%

4.25%

4.30%

4.31%

coordinated limit management of a financial institution’s credit portfolio

running a matched trading book

monitoring credit quality of assets and establishing a early warning system

managing the financial risk of the bank by protecting it from the adverse effects of changing interest rates

The sensitivity of the option value to changes in interest rates

The sensitivity of the option value to changes in implied volatility

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

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

only if they are dealing with brokers

only if dealing on an e-trading platform

only if they are dealing in non-marketable amounts

always

Both parties know what their future payments will be at the outset of the swap

There is payment of principal at maturity

Payments are always made gross

The fixed rate payer knows what his future payments will be at the outset of the swap

EUR 1,388,89

EUR 1,561.11

EUR 2,255.56

EUR 2,951.39