Question 1

A broker offers a dealer a financial incentive in the form of a price reduction to the previously agreed brokerage arrangements between the firms.

Accepted Answer

A)  This is considered as a normal discount for bulk business. 
B)  The offer should be agreed only by directors or senior management on each side and should be recorded in writing. 
C)  The offer should be expressly approved by both the individuals concerned and clearly recorded in writing. 
D)  The Model Code strongly discourages such practices. 
A)  This is considered as a normal discount for bulk business. 
B)  The offer should be agreed only by directors or senior management on each side and should be recorded in writing. 
C)  The offer should be expressly approved by both the individuals concerned and clearly recorded in writing. 
D)  The Model Code strongly discourages such practices. B

Question 2

What is the ISO code for silver?

Accepted Answer

A)  XAU 
B)  XAG 
C)  XPT 
D)  XPD 
A)  XAU 
B)  XAG 
C)  XPT 
D)  XPD B

Question 3

A CD with a face value of USD 50,000,000.00 and a coupon of 4.50% was issued at par for 90 days and is now trading at 4.50% with 30 days remaining to maturity. What has been the capital gain or loss since issue?

Accepted Answer

A)  +USD 373,599.00 
B)  +USD 186,099.00 
C)  -USD 1,400.99 
D)  Nil 
A)  +USD 373,599.00 
B)  +USD 186,099.00 
C)  -USD 1,400.99 
D)  Nil C

Question 4

The weighted average duration of liabilities can be increased by:

Accepted Answer

A)  buying additional 30-year German Government bonds 
B)  selling futures contracts on 30-year German Government bonds 
C)  buying futures contracts on 10-year German Government bonds 
D)  exercising an early repayment option on a long-term senior borrowing 
A)  buying additional 30-year German Government bonds 
B)  selling futures contracts on 30-year German Government bonds 
C)  buying futures contracts on 10-year German Government bonds 
D)  exercising an early repayment option on a long-term senior borrowing

Question 5

When can a broker consider a deal to be done?

Accepted Answer

A)  if he is confident that the dealer will not back out of the deal 
B)  if both parties to the deal have established credit lines for each other 
C)  if one party to the deal acknowledges interest 
D)  if he receives acknowledgement from both the dealers involved 
A)  if he is confident that the dealer will not back out of the deal 
B)  if both parties to the deal have established credit lines for each other 
C)  if one party to the deal acknowledges interest 
D)  if he receives acknowledgement from both the dealers involved

Question 6

Any breaches in confidentiality should be:

Accepted Answer

A)  documented and reported to the local regulator 
B)  communicated to local staff by a confidential internal circular 
C)  investigated immediately according to a properly documented procedure 
D)  reported to the ACI's Committee for Professionalism to investigate and advise accordingly 
A)  documented and reported to the local regulator 
B)  communicated to local staff by a confidential internal circular 
C)  investigated immediately according to a properly documented procedure 
D)  reported to the ACI's Committee for Professionalism to investigate and advise accordingly

Question 7

You quote a customer a spot cable 1.6050-55 in USD 3,000,000.00. If they sell USD to you, how much GBP will you be short of?

Accepted Answer

A)  4,816,500.00 
B)  1,869,158.88 
C)  1,868,57677 
D)  4,815,000.00 
A)  4,816,500.00 
B)  1,869,158.88 
C)  1,868,57677 
D)  4,815,000.00

Question 8

EURIBOR is the:

Accepted Answer

A)  Daily fixing of EUR interbank deposit rates in the European market 
B)  Daily fixing of EUR interbank deposit rates in the London market 
C)  Another name for EUR LIBOR 
D)  The ECB's official repo rate 
A)  Daily fixing of EUR interbank deposit rates in the European market 
B)  Daily fixing of EUR interbank deposit rates in the London market 
C)  Another name for EUR LIBOR 
D)  The ECB's official repo rate

Question 9

What is the minimum basis on which a BCP should be updated and tested?

Accepted Answer

A)  Every 6 months 
B)  Yearly 
C)  Whenever the BCP procedures are changed 
D)  Every 3 months 
A)  Every 6 months 
B)  Yearly 
C)  Whenever the BCP procedures are changed 
D)  Every 3 months

Question 10

The "spot basis" of a 2 against 4 months EUR/USD forward/forward swap is:

Accepted Answer

A)  usually the current spot EUR/USD mid-market rate 
B)  commonly the prevailing 4-month forward EUR/USD mid-rate 
C)  always the forward EUR/USD bid rate of the first swap leg 
D)  generally the prevailing 2-month forward EUR/USD mid-rate 
A)  usually the current spot EUR/USD mid-market rate 
B)  commonly the prevailing 4-month forward EUR/USD mid-rate 
C)  always the forward EUR/USD bid rate of the first swap leg 
D)  generally the prevailing 2-month forward EUR/USD mid-rate

Question 11

How many USD would you have to invest at 3.5% to be repaid USD125 million (principal plus interest) in 30 days?

Accepted Answer

A)  USD 124,641,442.43 
B)  USD 124,636,476.94 
C)  USD 124,635,416.67 
D)  USD 123,915,737.30 
A)  USD 124,641,442.43 
B)  USD 124,636,476.94 
C)  USD 124,635,416.67 
D)  USD 123,915,737.30

Question 12

You have quoted a Swiss customer spot USD/CHF as 0.9273-78, but he asks you to quote it as CHF/USD. What do you quote?

Accepted Answer

A)  0.9278-73 
B)  1.0784-78 
C)  1.0778-84 
D)  1,0773-78 
A)  0.9278-73 
B)  1.0784-78 
C)  1.0778-84 
D)  1,0773-78

Question 13

You are quoted the following rates: Spot cable        1.5340-43 0/N cable swap    0.14/0.11 T/N cable swap    0.16/0.13 S/N cable swap    0.43/0.37 At what rate can you buy cable for value tomorrow?

Accepted Answer

A)  1.534284 
B)  1.534316 
C)  1.534287 
D)  1.534313 
A)  1.534284 
B)  1.534316 
C)  1.534287 
D)  1.534313

Question 14

Net funding requirements in liquidity management are determined by means of:

Accepted Answer

A)  adding up expected vault cash outflows, ATMs and other cash points operated by the institution across all branches 
B)  establishing a forward cash flow plan that takes account of all contractual and behavioral cash flows related to assets and liabilities 
C)  the net cash flow from investment activities in the IFRS consolidated Statement of Cash Flows for prior periods 
D)  subtracting short-term liabilities from short-term assets 
A)  adding up expected vault cash outflows, ATMs and other cash points operated by the institution across all branches 
B)  establishing a forward cash flow plan that takes account of all contractual and behavioral cash flows related to assets and liabilities 
C)  the net cash flow from investment activities in the IFRS consolidated Statement of Cash Flows for prior periods 
D)  subtracting short-term liabilities from short-term assets

Question 15

Which of the following situations would be most likely to result in a negative mark-to-market for a bank borrowing short term and lending long term?

Accepted Answer

A)  credit spread tightening of the long term position 
B)  if the yield curve is inverted 
C)  if the yield curve becomes steeper 
D)  if there is a downward parallel shift in the yield curve 
A)  credit spread tightening of the long term position 
B)  if the yield curve is inverted 
C)  if the yield curve becomes steeper 
D)  if there is a downward parallel shift in the yield curve

Question 16

What is meant by "turn of the month"?

Accepted Answer

A)  the last calendar day of the month 
B)  the last bank business day of the month 
C)  value last business day of the month against first business day of the next month 
D)  value first business day of the month against last business day of the same month 
A)  the last calendar day of the month 
B)  the last bank business day of the month 
C)  value last business day of the month against first business day of the next month 
D)  value first business day of the month against last business day of the same month

Question 17

Which of the following is a Eurocurrency deposit?

Accepted Answer

A)  A 3-month deposit of USD 10,000,000.00 offered by a US bank in New York 
B)  A 3-month deposit of USD 10,000,000.00 offered by the US branch of a UK bank in New York 
C)  A 3-month deposit of USD 10,000,000.00 offered by a US bank in London 
D)  A 3-month deposit of GBP 10,000,000.00 offered by the UK branch of a US bank in London 
A)  A 3-month deposit of USD 10,000,000.00 offered by a US bank in New York 
B)  A 3-month deposit of USD 10,000,000.00 offered by the US branch of a UK bank in New York 
C)  A 3-month deposit of USD 10,000,000.00 offered by a US bank in London 
D)  A 3-month deposit of GBP 10,000,000.00 offered by the UK branch of a US bank in London

Question 18

Which type of repo is the most risky for the buyer?

Accepted Answer

A)  Delivery repo 
B)  HIC repo 
C)  TO-party repo 
D)  There is no real difference 
A)  Delivery repo 
B)  HIC repo 
C)  TO-party repo 
D)  There is no real difference

Question 19

An interest rate swap is:

Accepted Answer

A)  A contract to exchange one stream of income payments for another 
B)  A temporary exchange of one deposit for another of a longer maturity in the same currency 
C)  A forward-forward contract 
D)  All of the above 
A)  A contract to exchange one stream of income payments for another 
B)  A temporary exchange of one deposit for another of a longer maturity in the same currency 
C)  A forward-forward contract 
D)  All of the above

Question 20

If a dealer has any intention of assigning an interest rate swap to a third party soon after transacting that swap:

Accepted Answer

A)  The dealer should not reveal his future dealing intentions to his counterparty. 
B)  The dealer should make his intention to assign clear before transacting. 
C)  The dealer should agree the method of assignment before transacting. 
D)  The counterparty should specify whether or not assignment would be acceptable in negotiations. 
A)  The dealer should not reveal his future dealing intentions to his counterparty. 
B)  The dealer should make his intention to assign clear before transacting. 
C)  The dealer should agree the method of assignment before transacting. 
D)  The counterparty should specify whether or not assignment would be acceptable in negotiations.

A broker offers a dealer a financial incentive in the form of a price reduction to the previously agreed brokerage arrangements between the firms.

What is the ISO code for silver?

A CD with a face value of USD 50,000,000.00 and a coupon of 4.50% was issued at par for 90 days and is now trading at 4.50% with 30 days remaining to maturity. What has been the capital gain or loss since issue?

The weighted average duration of liabilities can be increased by:

When can a broker consider a deal to be done?

Any breaches in confidentiality should be:

You quote a customer a spot cable 1.6050-55 in USD 3,000,000.00. If they sell USD to you, how much GBP will you be short of?

EURIBOR is the:

What is the minimum basis on which a BCP should be updated and tested?

The "spot basis" of a 2 against 4 months EUR/USD forward/forward swap is:

How many USD would you have to invest at 3.5% to be repaid USD125 million (principal plus interest) in 30 days?

You have quoted a Swiss customer spot USD/CHF as 0.9273-78, but he asks you to quote it as CHF/USD. What do you quote?

You are quoted the following rates: Spot cable 1.5340-43 0/N cable swap 0.14/0.11 T/N cable swap 0.16/0.13 S/N cable swap 0.43/0.37 At what rate can you buy cable for value tomorrow?

Net funding requirements in liquidity management are determined by means of:

Which of the following situations would be most likely to result in a negative mark-to-market for a bank borrowing short term and lending long term?

What is meant by "turn of the month"?

Which of the following is a Eurocurrency deposit?

Which type of repo is the most risky for the buyer?

An interest rate swap is:

If a dealer has any intention of assigning an interest rate swap to a third party soon after transacting that swap:

ACI Dealing Certificate-Part A

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Exam 2: ACI Dealing Certificate-Part B

A broker offers a dealer a financial incentive in the form of a price reduction to the previously agreed brokerage arrangements between the firms.

What is the ISO code for silver?

A CD with a face value of USD 50,000,000.00 and a coupon of 4.50% was issued at par for 90 days and is now trading at 4.50% with 30 days remaining to maturity. What has been the capital gain or loss since issue?

The weighted average duration of liabilities can be increased by:

When can a broker consider a deal to be done?

Any breaches in confidentiality should be:

You quote a customer a spot cable 1.6050-55 in USD 3,000,000.00. If they sell USD to you, how much GBP will you be short of?

EURIBOR is the:

What is the minimum basis on which a BCP should be updated and tested?

The "spot basis" of a 2 against 4 months EUR/USD forward/forward swap is:

How many USD would you have to invest at 3.5% to be repaid USD125 million (principal plus interest) in 30 days?

You have quoted a Swiss customer spot USD/CHF as 0.9273-78, but he asks you to quote it as CHF/USD. What do you quote?

You are quoted the following rates: Spot cable 1.5340-43 0/N cable swap 0.14/0.11 T/N cable swap 0.16/0.13 S/N cable swap 0.43/0.37 At what rate can you buy cable for value tomorrow?

Net funding requirements in liquidity management are determined by means of:

Which of the following situations would be most likely to result in a negative mark-to-market for a bank borrowing short term and lending long term?

What is meant by "turn of the month"?

Which of the following is a Eurocurrency deposit?

Which type of repo is the most risky for the buyer?

An interest rate swap is:

If a dealer has any intention of assigning an interest rate swap to a third party soon after transacting that swap:

ACI Dealing Certificate-Part A

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