Question 1

You are quoted the following market rates: spot EUR/USD. 1.2250 3M (91-day) EUR 2.55% 3M (91-day) USD. 2.00% What is 3-month EUR/USD?

Accepted Answer

A)  1.2232 
B)  1.2233 
C)  1.2234 
D)  1.2267 
A)  1.2232 
B)  1.2233 
C)  1.2234 
D)  1.2267

Question 2

What is a Vostro account?

Accepted Answer

A)  Your account at another bank 
B)  A foreign bank's account in your bank in your dome 
C)  An account in your bank used for internal transact 
D)  A customer's account at your bank 
A)  Your account at another bank 
B)  A foreign bank's account in your bank in your dome 
C)  An account in your bank used for internal transact 
D)  A customer's account at your bank

Question 3

Where the matter of dealing for personal account is concerned, the Model Code recommends that:

Accepted Answer

A)  Subject to local legal requirements, this matter i 
B)  Bank management should encourage such activities b 
C)  Where this is allowed, bank management should have 
D)  Bank management should allow staff to deal for the 
A)  Subject to local legal requirements, this matter i 
B)  Bank management should encourage such activities b 
C)  Where this is allowed, bank management should have 
D)  Bank management should allow staff to deal for the

Question 4

What is the maximum maturity of a London CD?

Accepted Answer

A)  One year 
B)  270 days 
C)  183 days 
D)  5 years 
A)  One year 
B)  270 days 
C)  183 days 
D)  5 years

Question 5

Basis risk on a futures contract is:

Accepted Answer

A)  The risk of an adverse change in the futures price 
B)  The risk of an adverse change in the spread betwee 
C)  The progressive illiquidity of a futures contract 
D)  The risk of a divergence between the futures price 
A)  The risk of an adverse change in the futures price 
B)  The risk of an adverse change in the spread betwee 
C)  The progressive illiquidity of a futures contract 
D)  The risk of a divergence between the futures price

Question 6

A customer gives you GBP 25 million at 6.625% same day for 7 days. Through a broker, you place the funds with a bank for the same period at 6.6875%. Brokerage is charged at 2 basis points per annum. What is the net profit or loss on the deal?

Accepted Answer

A)  Profit of GBP 299.66 
B)  Profit of GBP 203.77 
C)  Loss of GBP 299.66 
D)  Loss of GBP 203.77 
A)  Profit of GBP 299.66 
B)  Profit of GBP 203.77 
C)  Loss of GBP 299.66 
D)  Loss of GBP 203.77

Question 7

You bought USD 5,000,000 against EUR at 1.1037 and 3,000,000 at 1.1052. If the EUR/USD rate is now quoted 1.1015/17, and if you deal at that rate, what profit would you make?

Accepted Answer

A)  Nil 
B)  A profit of EUR 16,847.58 
C)  A loss 
D)  A profit of EUR 18,166.05 
A)  Nil 
B)  A profit of EUR 16,847.58 
C)  A loss 
D)  A profit of EUR 18,166.05

Question 8

What is the maximum maturity of a US Treasury bill?

Accepted Answer

A)  One year 
B)  270 days 
C)  183 days 
D)  5 years 
A)  One year 
B)  270 days 
C)  183 days 
D)  5 years

Question 9

Which of the following are transferable instruments?

Accepted Answer

A)  Eurocertificate of deposit 
B)  US Treasury bill 
C)  CP 
D)  All of the above 
A)  Eurocertificate of deposit 
B)  US Treasury bill 
C)  CP 
D)  All of the above

Question 10

You and a dealer at another bank have an informal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. The Model Code states that:

Accepted Answer

A)  The other dealer should act with honour, honesty 
B)  It is a purely matter for your two institutions. 
C)  Such arrangements are not in any way enforceable o 
D)  All of the above. 
A)  The other dealer should act with honour, honesty 
B)  It is a purely matter for your two institutions. 
C)  Such arrangements are not in any way enforceable o 
D)  All of the above.

Question 11

If spot GBP/CHF is quoted 2.3875- 80 and the 3-month forward outright is 2.3660-70, what are the forward points?

Accepted Answer

A)  21.5/21 
B)  210/215 
C)  215/210 
D)  21/21.5 
A)  21.5/21 
B)  210/215 
C)  215/210 
D)  21/21.5

Question 12

In case of a default on a repo by the seller:

Accepted Answer

A)  The buyer can liquidate the collateral 
B)  The buyer has to liquidate the collateral 
C)  The buyer cannot liquidate the collateral until th 
D)  A court is appointed to decide what happens to the 
A)  The buyer can liquidate the collateral 
B)  The buyer has to liquidate the collateral 
C)  The buyer cannot liquidate the collateral until th 
D)  A court is appointed to decide what happens to the

Question 13

A 12-month EUR/USD swap is quoted at 241/244. EUR interest rates are expected to fall, with USD interest rates (which are higher) remaining stable. Assuming no change in the spot rate what effect would you expect on the forward points?

Accepted Answer

A)  Unchanged 
B)  Move towards 228/231 
C)  Move towards 257/260 
D)  Insufficient information 
A)  Unchanged 
B)  Move towards 228/231 
C)  Move towards 257/260 
D)  Insufficient information

Question 14

The Model Code rules that deals at non-current rates:

Accepted Answer

A)  Are forbidden. 
B)  Require prior regulatory approval. 
C)  Require the prior express permission of the senior 
D)  Should be marked to market daily. 
A)  Are forbidden. 
B)  Require prior regulatory approval. 
C)  Require the prior express permission of the senior 
D)  Should be marked to market daily.

Question 15

Which of the following is true?

Accepted Answer

A)  The CME eurodollar futures contract has a tick val 
B)  The Euronext. LIFFE EURIBOR futures contract has a 
C)  The Euronext. LIFFE CHF futures contract has a tic 
D)  All of the above 
A)  The CME eurodollar futures contract has a tick val 
B)  The Euronext. LIFFE EURIBOR futures contract has a 
C)  The Euronext. LIFFE CHF futures contract has a tic 
D)  All of the above

Question 16

Half an hour ago you were made a price in USD/CAD of 1.5250-55 and sold USD 10 million. The price is now 1.5232-37 and you square your position. What is your profit or loss?

Accepted Answer

A)  + CAD 23,000 
B)  + CAD 13,000 
C)  + CAD 18,000 
D)  - CAD 13,000 
A)  + CAD 23,000 
B)  + CAD 13,000 
C)  + CAD 18,000 
D)  - CAD 13,000

Question 17

A dealer needs to buy USD against SGD. Of the following rates quoted to him, which is the best rate for him?

Accepted Answer

A)  1.4323-28 
B)  1.4320-25 
C)  1.4315-20 
D)  1.4318-23 
A)  1.4323-28 
B)  1.4320-25 
C)  1.4315-20 
D)  1.4318-23

Question 18

What is the day count/annual basis convention for euroyen deposits?

Accepted Answer

A)  Actual/365 
B)  Actual/360 
C)  Actual/actual 
D)  30E/360 
A)  Actual/365 
B)  Actual/360 
C)  Actual/actual 
D)  30E/360

Question 19

The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are:

Accepted Answer

A)  Exchange-traded 
B)  Guaranteed 
C)  Standardised 
D)  All of the above 
A)  Exchange-traded 
B)  Guaranteed 
C)  Standardised 
D)  All of the above

Question 20

If EUR/USD is 1.1025-28 and the 6- month swap is 112.50/113, what is the 6-month outright price?

Accepted Answer

A)  1.1380-1.11405 
B)  1.11375-1.1141 
C)  1.09125-1.0915 
D)  None of these 
A)  1.1380-1.11405 
B)  1.11375-1.1141 
C)  1.09125-1.0915 
D)  None of these

You are quoted the following market rates: spot EUR/USD. 1.2250 3M (91-day) EUR 2.55% 3M (91-day) USD. 2.00% What is 3-month EUR/USD?

What is a Vostro account?

Where the matter of dealing for personal account is concerned, the Model Code recommends that:

What is the maximum maturity of a London CD?

Basis risk on a futures contract is:

A customer gives you GBP 25 million at 6.625% same day for 7 days. Through a broker, you place the funds with a bank for the same period at 6.6875%. Brokerage is charged at 2 basis points per annum. What is the net profit or loss on the deal?

You bought USD 5,000,000 against EUR at 1.1037 and 3,000,000 at 1.1052. If the EUR/USD rate is now quoted 1.1015/17, and if you deal at that rate, what profit would you make?

What is the maximum maturity of a US Treasury bill?

Which of the following are transferable instruments?

You and a dealer at another bank have an informal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. The Model Code states that:

If spot GBP/CHF is quoted 2.3875- 80 and the 3-month forward outright is 2.3660-70, what are the forward points?

In case of a default on a repo by the seller:

A 12-month EUR/USD swap is quoted at 241/244. EUR interest rates are expected to fall, with USD interest rates (which are higher) remaining stable. Assuming no change in the spot rate what effect would you expect on the forward points?

The Model Code rules that deals at non-current rates:

Which of the following is true?

Half an hour ago you were made a price in USD/CAD of 1.5250-55 and sold USD 10 million. The price is now 1.5232-37 and you square your position. What is your profit or loss?

A dealer needs to buy USD against SGD. Of the following rates quoted to him, which is the best rate for him?

What is the day count/annual basis convention for euroyen deposits?

The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are:

If EUR/USD is 1.1025-28 and the 6- month swap is 112.50/113, what is the 6-month outright price?

ACI Dealing Certificate-Part B

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Exam 1: ACI Dealing Certificate-Part A

You are quoted the following market rates: spot EUR/USD. 1.2250 3M (91-day) EUR 2.55% 3M (91-day) USD. 2.00% What is 3-month EUR/USD?

What is a Vostro account?

Where the matter of dealing for personal account is concerned, the Model Code recommends that:

What is the maximum maturity of a London CD?

Basis risk on a futures contract is:

A customer gives you GBP 25 million at 6.625% same day for 7 days. Through a broker, you place the funds with a bank for the same period at 6.6875%. Brokerage is charged at 2 basis points per annum. What is the net profit or loss on the deal?

You bought USD 5,000,000 against EUR at 1.1037 and 3,000,000 at 1.1052. If the EUR/USD rate is now quoted 1.1015/17, and if you deal at that rate, what profit would you make?

What is the maximum maturity of a US Treasury bill?

Which of the following are transferable instruments?

You and a dealer at another bank have an informal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. The Model Code states that:

If spot GBP/CHF is quoted 2.3875- 80 and the 3-month forward outright is 2.3660-70, what are the forward points?

In case of a default on a repo by the seller:

A 12-month EUR/USD swap is quoted at 241/244. EUR interest rates are expected to fall, with USD interest rates (which are higher) remaining stable. Assuming no change in the spot rate what effect would you expect on the forward points?

The Model Code rules that deals at non-current rates:

Which of the following is true?

Half an hour ago you were made a price in USD/CAD of 1.5250-55 and sold USD 10 million. The price is now 1.5232-37 and you square your position. What is your profit or loss?

A dealer needs to buy USD against SGD. Of the following rates quoted to him, which is the best rate for him?

What is the day count/annual basis convention for euroyen deposits?

The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are:

If EUR/USD is 1.1025-28 and the 6- month swap is 112.50/113, what is the 6-month outright price?

ACI Dealing Certificate-Part B

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