Question 1

An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:

Accepted Answer

A)  European-style option 
B)  American-style option 
C)  Bermudan option 
D)  Asian option 
A)  European-style option 
B)  American-style option 
C)  Bermudan option 
D)  Asian option

Question 2

Deals transacted direct or via a broker prior to 5:00am Sydney time on Monday morning:

Accepted Answer

A)  Are invalid. 
B)  Must be approved by senior management before confi 
C)  Cannot be entered into without the approval of the 
D)  Are not considered to have been done in normal con 
A)  Are invalid. 
B)  Must be approved by senior management before confi 
C)  Cannot be entered into without the approval of the 
D)  Are not considered to have been done in normal con

Question 3

What is a master agreement intended to do?

Accepted Answer

A)  Describe the parameters of a dealing relationship 
B)  Set out the rights and obligations of two parties 
C)  Apply to all transactions between two parties 
D)  All of the above 
A)  Describe the parameters of a dealing relationship 
B)  Set out the rights and obligations of two parties 
C)  Apply to all transactions between two parties 
D)  All of the above

Question 4

You buy a 181-day 2.75% CD with a face value of USD 1,500,000 at par when it is issued. You sell it in the secondary market after 150 days at 2.60%. What is your holding period yield?

Accepted Answer

A)  2.60% 
B)  2.75% 
C)  2.775% 
D)  2.813% 
A)  2.60% 
B)  2.75% 
C)  2.775% 
D)  2.813%

Question 5

The use of mobile phones from within the dealing room for transacting business:

Accepted Answer

A)  Is not considered good practice. 
B)  Is accepted in case of direct deal input into the 
C)  Is accepted for senior dealers. 
D)  Is accepted for hedging transactions. 
A)  Is not considered good practice. 
B)  Is accepted in case of direct deal input into the 
C)  Is accepted for senior dealers. 
D)  Is accepted for hedging transactions.

Question 6

The organisational structure of market participants should ensure a strict segregation between front and back office of:

Accepted Answer

A)  Duties and reporting lines. 
B)  Systems. 
C)  Career paths. 
D)  All of the above. 
A)  Duties and reporting lines. 
B)  Systems. 
C)  Career paths. 
D)  All of the above.

Question 7

Are the forward points materially affected by changes in the spot rate?

Accepted Answer

A)  never 
B)  Only for very large movements and longer terms 
C)  always 
D)  spot is the principal influence 
A)  never 
B)  Only for very large movements and longer terms 
C)  always 
D)  spot is the principal influence

Question 8

When dealing with a fund manager, who will allocate shares in a transaction to his unknown clients after the transaction has been executed with you, you should:

Accepted Answer

A)  Agree in writing with the fund manager that the al 
B)  Insist on the allocation being made and confirmed 
C)  Agree in writing with the fund manager that he wil 
D)  Any of the above. 
A)  Agree in writing with the fund manager that the al 
B)  Insist on the allocation being made and confirmed 
C)  Agree in writing with the fund manager that he wil 
D)  Any of the above.

Question 9

You are quoted the following market rates: spot GBP/USD. 1.6530 9M (272-day) GBP. 3.60% 9M (272-day) USD. 1.95% What are the 9-month GBP/USD forward points?

Accepted Answer

A)  +206 
B)  +197 
C)  -195 
D)  -204 
A)  +206 
B)  +197 
C)  -195 
D)  -204

Question 10

Where dealing through an intermediary with an unidentified principal, the Model Code recommends:

Accepted Answer

A)  It is good practice for compliance, legal or credi 
B)  Management should have in place a clear written po 
C)  Management needs to be aware of the risks involved 
D)  All of the above. 
A)  It is good practice for compliance, legal or credi 
B)  Management should have in place a clear written po 
C)  Management needs to be aware of the risks involved 
D)  All of the above.

Question 11

A customer based in the UK exports automotive parts to the US. His main competitor is in France? What type of exposure to currency risk is posed by movements in EUR/USD?

Accepted Answer

A)  Transaction exposure 
B)  Translation exposure 
C)  Economic exposure 
D)  None 
A)  Transaction exposure 
B)  Translation exposure 
C)  Economic exposure 
D)  None

Question 12

What is the purpose of a long strangle option strategy?

Accepted Answer

A)  To anticipate very low volatility in the price of 
B)  To anticipate moderately high volatility in the pr 
C)  To anticipate moderate volatility in the price of 
D)  To anticipate very high volatility in the price of 
A)  To anticipate very low volatility in the price of 
B)  To anticipate moderately high volatility in the pr 
C)  To anticipate moderate volatility in the price of 
D)  To anticipate very high volatility in the price of

Question 13

Banks have a fiduciary responsibility to ensure that clients have all necessary information to understand the transaction because this:

Accepted Answer

A)  Will encourage clients to do more business. 
B)  Will help prevent potential litigation. 
C)  Will help banks sell sophisticated risk management 
D)  Is required by all regulators. 
A)  Will encourage clients to do more business. 
B)  Will help prevent potential litigation. 
C)  Will help banks sell sophisticated risk management 
D)  Is required by all regulators.

Question 14

When is interest conventionally due on a 3-year interbank eurodollar deposit?

Accepted Answer

A)  At maturity 
B)  Annually 
C)  Semi-annually 
D)  Quarterly 
A)  At maturity 
B)  Annually 
C)  Semi-annually 
D)  Quarterly

Question 15

Under which circumstances are banks allowed to park positions with a counterparty?:

Accepted Answer

A)  It is forbidden to park positions. 
B)  In conditions of exceptional volatility. 
C)  If the two counterparties agree. 
D)  If approved by senior management. 
A)  It is forbidden to park positions. 
B)  In conditions of exceptional volatility. 
C)  If the two counterparties agree. 
D)  If approved by senior management.

Question 16

An option contract that gives the buyer the right to exercise the option at the average of the prices of the underlying during its life is called:

Accepted Answer

A)  European-style option 
B)  American-style option 
C)  Bermudan option 
D)  Asian option 
A)  European-style option 
B)  American-style option 
C)  Bermudan option 
D)  Asian option

Question 17

A broker can consider a deal as done if:

Accepted Answer

A)  He is confident that the dealer will not back out 
B)  Both parties have established credit lines for eac 
C)  One party acknowledges interest. 
D)  He receives verbal acknowledgement from the dealer 
A)  He is confident that the dealer will not back out 
B)  Both parties have established credit lines for eac 
C)  One party acknowledges interest. 
D)  He receives verbal acknowledgement from the dealer

Question 18

The delta of an at-the-money long call option is:

Accepted Answer

A)  Between +0.5 and +1 
B)  +0.5 
C)  Between 0 and +0.5 
D)  Zero 
A)  Between +0.5 and +1 
B)  +0.5 
C)  Between 0 and +0.5 
D)  Zero

Question 19

Eurodollar futures are:

Accepted Answer

A)  Traded on the CME and have a face value of USD 500 
B)  Traded on the CBOT and have a face value of USD 1, 
C)  Traded on the CBOT and have a face value of USD 50 
D)  Traded on the CME and have a face value of USD 1,0 
A)  Traded on the CME and have a face value of USD 500 
B)  Traded on the CBOT and have a face value of USD 1, 
C)  Traded on the CBOT and have a face value of USD 50 
D)  Traded on the CME and have a face value of USD 1,0

Question 20

What is the ISO code for the currency of Hungary?

Accepted Answer

A)  HUG 
B)  HKD 
C)  HRN 
D)  HUF 
A)  HUG 
B)  HKD 
C)  HRN 
D)  HUF

An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:

Deals transacted direct or via a broker prior to 5:00am Sydney time on Monday morning:

What is a master agreement intended to do?

You buy a 181-day 2.75% CD with a face value of USD 1,500,000 at par when it is issued. You sell it in the secondary market after 150 days at 2.60%. What is your holding period yield?

The use of mobile phones from within the dealing room for transacting business:

The organisational structure of market participants should ensure a strict segregation between front and back office of:

Are the forward points materially affected by changes in the spot rate?

When dealing with a fund manager, who will allocate shares in a transaction to his unknown clients after the transaction has been executed with you, you should:

You are quoted the following market rates: spot GBP/USD. 1.6530 9M (272-day) GBP. 3.60% 9M (272-day) USD. 1.95% What are the 9-month GBP/USD forward points?

Where dealing through an intermediary with an unidentified principal, the Model Code recommends:

A customer based in the UK exports automotive parts to the US. His main competitor is in France? What type of exposure to currency risk is posed by movements in EUR/USD?

What is the purpose of a long strangle option strategy?

Banks have a fiduciary responsibility to ensure that clients have all necessary information to understand the transaction because this:

When is interest conventionally due on a 3-year interbank eurodollar deposit?

Under which circumstances are banks allowed to park positions with a counterparty?:

An option contract that gives the buyer the right to exercise the option at the average of the prices of the underlying during its life is called:

A broker can consider a deal as done if:

The delta of an at-the-money long call option is:

Eurodollar futures are:

What is the ISO code for the currency of Hungary?

ACI Dealing Certificate-Part B

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Exam 1: ACI Dealing Certificate-Part A

An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:

Deals transacted direct or via a broker prior to 5:00am Sydney time on Monday morning:

What is a master agreement intended to do?

You buy a 181-day 2.75% CD with a face value of USD 1,500,000 at par when it is issued. You sell it in the secondary market after 150 days at 2.60%. What is your holding period yield?

The use of mobile phones from within the dealing room for transacting business:

The organisational structure of market participants should ensure a strict segregation between front and back office of:

Are the forward points materially affected by changes in the spot rate?

When dealing with a fund manager, who will allocate shares in a transaction to his unknown clients after the transaction has been executed with you, you should:

You are quoted the following market rates: spot GBP/USD. 1.6530 9M (272-day) GBP. 3.60% 9M (272-day) USD. 1.95% What are the 9-month GBP/USD forward points?

Where dealing through an intermediary with an unidentified principal, the Model Code recommends:

A customer based in the UK exports automotive parts to the US. His main competitor is in France? What type of exposure to currency risk is posed by movements in EUR/USD?

What is the purpose of a long strangle option strategy?

Banks have a fiduciary responsibility to ensure that clients have all necessary information to understand the transaction because this:

When is interest conventionally due on a 3-year interbank eurodollar deposit?

Under which circumstances are banks allowed to park positions with a counterparty?:

An option contract that gives the buyer the right to exercise the option at the average of the prices of the underlying during its life is called:

A broker can consider a deal as done if:

The delta of an at-the-money long call option is:

Eurodollar futures are:

What is the ISO code for the currency of Hungary?

ACI Dealing Certificate-Part B

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