Question 1

The Model Code's correct recommendation regarding electronic trading states:

Accepted Answer

A)  Time stamps on e-trading platforms need to be internally and globally synchronised to ensure appropriate tracking of trades 
B)  All records should be archived and appropriate audit trails must be maintained as required by the local Central Bank 
C)  Regular tests for loss of access to external liquidity platforms but not loss of service to clients should be undertaken 
D)  Testing of the system's capability to cope with extreme volumes should be carried out annually 
A)  Time stamps on e-trading platforms need to be internally and globally synchronised to ensure appropriate tracking of trades 
B)  All records should be archived and appropriate audit trails must be maintained as required by the local Central Bank 
C)  Regular tests for loss of access to external liquidity platforms but not loss of service to clients should be undertaken 
D)  Testing of the system's capability to cope with extreme volumes should be carried out annually

Question 2

What usually happens to the collateral in a tri-party repo?

Accepted Answer

A)  It is put at the disposal of the buyer 
B)  It is held by the seller in the name of the buyer 
C)  It is held by the tn-party agent in the name of the buyer 
D)  It is frozen in the sellers account with the tri-panty agent 
A)  It is put at the disposal of the buyer 
B)  It is held by the seller in the name of the buyer 
C)  It is held by the tn-party agent in the name of the buyer 
D)  It is frozen in the sellers account with the tri-panty agent

Question 3

Between which departments are clear and structured escalation procedures required for the management of incorrect funding balances?

Accepted Answer

A)  Nostro reconciliations, the Cash Management Department and Operations 
B)  Front Office, the Cash Management Department and Operations 
C)  Front Office, Nostro reconciliations and Operations 
D)  Front Office, Nostro reconciliations and the Cash Management Department 
A)  Nostro reconciliations, the Cash Management Department and Operations 
B)  Front Office, the Cash Management Department and Operations 
C)  Front Office, Nostro reconciliations and Operations 
D)  Front Office, Nostro reconciliations and the Cash Management Department

Question 4

A payer's 3-month USD LIBOR swap with a remaining term of five years must be reported as:

Accepted Answer

A)  a five-year liability and a three-month asset 
B)  a five-year asset and a three-month liability 
C)  a five-year asset only 
D)  a three-month liability only 
A)  a five-year liability and a three-month asset 
B)  a five-year asset and a three-month liability 
C)  a five-year asset only 
D)  a three-month liability only

Question 5

Name switching is:

Accepted Answer

A)  the practice of a dealer attempting to replace one customer by a new one in a previously dealt transaction 
B)  the practice of a broker having to show a new name to the dealer, although he was full on the first name presented to him 
C)  the practice of a broker attempting to substitute a third name between the two original counterparties to clear the transaction 
D)  the practice of a broker attempting to show a substitution name to get out of a situation in which he was stuffed by a dealer 
A)  the practice of a dealer attempting to replace one customer by a new one in a previously dealt transaction 
B)  the practice of a broker having to show a new name to the dealer, although he was full on the first name presented to him 
C)  the practice of a broker attempting to substitute a third name between the two original counterparties to clear the transaction 
D)  the practice of a broker attempting to show a substitution name to get out of a situation in which he was stuffed by a dealer

Question 6

The major difference between FRAs and futures is that FRAs are:

Accepted Answer

A)  Exchange-traded 
B)  Margined 
C)  Standardized 
D)  Dealtoverthe counter 
A)  Exchange-traded 
B)  Margined 
C)  Standardized 
D)  Dealtoverthe counter

Question 7

Which of the following statements regarding economic capital is correct?

Accepted Answer

A)  Economic capital is calculated externally and is the amount of capital the firm should have to support its target credit rating 
B)  Economic capital is calculated on an expected shortfall basis with a specific time horizon and confidence level. 
C)  Economic capital is used for measuring and reporting risks across a financial organisation. 
D)  Economic capital is always lower than regulatory capital because of the more adequate modelling of correlation effects compared to the regulatory approach. 
A)  Economic capital is calculated externally and is the amount of capital the firm should have to support its target credit rating 
B)  Economic capital is calculated on an expected shortfall basis with a specific time horizon and confidence level. 
C)  Economic capital is used for measuring and reporting risks across a financial organisation. 
D)  Economic capital is always lower than regulatory capital because of the more adequate modelling of correlation effects compared to the regulatory approach.

Question 8

An interest rate guarantee (IRG) is:

Accepted Answer

A)  AnFRA 
B)  An option on an FRA 
C)  A collar 
D)  AnIRS 
A)  AnFRA 
B)  An option on an FRA 
C)  A collar 
D)  AnIRS

Question 9

For which of the following might an MT370 be used?

Accepted Answer

A)  To confirm an FX transaction 
B)  To advise the netting position of a currency in NDFS 
C)  To advise changes in SSIs 
D)  To confirm a MM transaction 
A)  To confirm an FX transaction 
B)  To advise the netting position of a currency in NDFS 
C)  To advise changes in SSIs 
D)  To confirm a MM transaction

Question 10

Which of the following statements about requirements for dealing with limit violations is correct?

Accepted Answer

A)  Financial institutions have to establish procedures for handling limit breaches that are in accordance with their decision-making hierarchy. 
B)  If a partial limit violation does not exceed the overall limit, no reaction is required. 
C)  The definition of escalation levels is not required in order to react appropriately to different sorts and intensities of limit breaches. 
D)  It is adequate and proper to define reactions only to standard cases of limit violations. 
A)  Financial institutions have to establish procedures for handling limit breaches that are in accordance with their decision-making hierarchy. 
B)  If a partial limit violation does not exceed the overall limit, no reaction is required. 
C)  The definition of escalation levels is not required in order to react appropriately to different sorts and intensities of limit breaches. 
D)  It is adequate and proper to define reactions only to standard cases of limit violations.

Question 11

What is the ISO code for platinum?

Accepted Answer

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

Question 12

A broker offers a dealer an incentive in the form of a reduction to the agreed schedule of brokerage between the firms.

Accepted Answer

A)  This is a normal volume discount. 
B)  The offer requires approval in writing by both senior managements. 
C)  The offer requires agreement in writing between the broker and the dealer. 
D)  This is illegal. 
A)  This is a normal volume discount. 
B)  The offer requires approval in writing by both senior managements. 
C)  The offer requires agreement in writing between the broker and the dealer. 
D)  This is illegal.

Question 13

Making interest rate swap transactions subject to agreement on documentation:

Accepted Answer

A)  Is recommended where the complications of the transaction warrant the practice. 
B)  Is strictly forbidden. 
C)  Is considered bad practice. 
D)  Must have senior management approval. 
A)  Is recommended where the complications of the transaction warrant the practice. 
B)  Is strictly forbidden. 
C)  Is considered bad practice. 
D)  Must have senior management approval.

Question 14

What happens if an instruction remains unmatched and/or unsettled through CLS Bank?

Accepted Answer

A)  If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis. 
B)  If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis. 
C)  If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis. 
D)  If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades. 
A)  If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis. 
B)  If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis. 
C)  If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis. 
D)  If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades.

Question 15

What is a "normal" shaped curve?

Accepted Answer

A)  Gradual positive slope 
B)  Steep positive slope 
C)  Flat 
D)  Inverted 
A)  Gradual positive slope 
B)  Steep positive slope 
C)  Flat 
D)  Inverted

Question 16

How many GBP would you have to invest at 0.55% to be repaid GBP 2,000,000.00 (principal plus interest) in 90 days?

Accepted Answer

A)  GBP 1,997,253.78 
B)  GBP 1,997,291.34 
C)  GBP 1,997,287.67 
D)  GBP 1,997,250.00 
A)  GBP 1,997,253.78 
B)  GBP 1,997,291.34 
C)  GBP 1,997,287.67 
D)  GBP 1,997,250.00

Question 17

A 3-month (90-day) NZD deposit is 2.75% and 6-month (180-day) NZD deposit is 3.00%. What is the 3x6 NZD deposit rate?

Accepted Answer

A)  3.2281% 
B)  3.2278% 
C)  3.00% 
D)  2.875% 
A)  3.2281% 
B)  3.2278% 
C)  3.00% 
D)  2.875%

Question 18

The columns below list short-term cash rates on 3rd April and 3rd F1ay 3rd April 3rd May   Describe the shape of the short-term segment of the yield curve on 3' April using market terminology. In addition, describe the change in the shape of the curve between 3rd April and 3rd May.

Accepted Answer

A)  Positive, steepening 
B)  Positive, flattening 
C)  Inverted, steepening 
D)  Inverted, flattening 
A)  Positive, steepening 
B)  Positive, flattening 
C)  Inverted, steepening 
D)  Inverted, flattening

Question 19

Written confirmation is a function that can be done by:

Accepted Answer

A)  Any dealer as long as he/she is not a party to the trade. 
B)  Staff in the back-office. 
C)  Staff in the dealing room who are not dealing. 
D)  Any staff outside the dealing room. 
A)  Any dealer as long as he/she is not a party to the trade. 
B)  Staff in the back-office. 
C)  Staff in the dealing room who are not dealing. 
D)  Any staff outside the dealing room.

Question 20

Which one of the following bullion coins has a 999.9/1000 gold purity (.9999 fineness)?

Accepted Answer

A)  the Canadian "Maple Leaf" 
B)  the South African "Krugerand" 
C)  the American "Gold Eagle" 
D)  the United Kingdom "Sovereign" 
A)  the Canadian "Maple Leaf" 
B)  the South African "Krugerand" 
C)  the American "Gold Eagle" 
D)  the United Kingdom "Sovereign"

The Model Code's correct recommendation regarding electronic trading states:

What usually happens to the collateral in a tri-party repo?

Between which departments are clear and structured escalation procedures required for the management of incorrect funding balances?

A payer's 3-month USD LIBOR swap with a remaining term of five years must be reported as:

Name switching is:

The major difference between FRAs and futures is that FRAs are:

Which of the following statements regarding economic capital is correct?

An interest rate guarantee (IRG) is:

For which of the following might an MT370 be used?

Which of the following statements about requirements for dealing with limit violations is correct?

What is the ISO code for platinum?

A broker offers a dealer an incentive in the form of a reduction to the agreed schedule of brokerage between the firms.

Making interest rate swap transactions subject to agreement on documentation:

What happens if an instruction remains unmatched and/or unsettled through CLS Bank?

What is a "normal" shaped curve?

How many GBP would you have to invest at 0.55% to be repaid GBP 2,000,000.00 (principal plus interest) in 90 days?

A 3-month (90-day) NZD deposit is 2.75% and 6-month (180-day) NZD deposit is 3.00%. What is the 3x6 NZD deposit rate?

The columns below list short-term cash rates on 3rd April and 3rd F1ay 3rd April 3rd May Describe the shape of the short-term segment of the yield curve on 3' April using market terminology. In addition, describe the change in the shape of the curve between 3rd April and 3rd May.

Written confirmation is a function that can be done by:

Which one of the following bullion coins has a 999.9/1000 gold purity (.9999 fineness)?

ACI Dealing Certificate-Part A

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Exam 2: ACI Dealing Certificate-Part B

The Model Code's correct recommendation regarding electronic trading states:

What usually happens to the collateral in a tri-party repo?

Between which departments are clear and structured escalation procedures required for the management of incorrect funding balances?

A payer's 3-month USD LIBOR swap with a remaining term of five years must be reported as:

Name switching is:

The major difference between FRAs and futures is that FRAs are:

Which of the following statements regarding economic capital is correct?

An interest rate guarantee (IRG) is:

For which of the following might an MT370 be used?

Which of the following statements about requirements for dealing with limit violations is correct?

What is the ISO code for platinum?

A broker offers a dealer an incentive in the form of a reduction to the agreed schedule of brokerage between the firms.

Making interest rate swap transactions subject to agreement on documentation:

What happens if an instruction remains unmatched and/or unsettled through CLS Bank?

What is a "normal" shaped curve?

How many GBP would you have to invest at 0.55% to be repaid GBP 2,000,000.00 (principal plus interest) in 90 days?

A 3-month (90-day) NZD deposit is 2.75% and 6-month (180-day) NZD deposit is 3.00%. What is the 3x6 NZD deposit rate?

The columns below list short-term cash rates on 3rd April and 3rd F1ay 3rd April 3rd May Describe the shape of the short-term segment of the yield curve on 3' April using market terminology. In addition, describe the change in the shape of the curve between 3rd April and 3rd May.

Written confirmation is a function that can be done by:

Which one of the following bullion coins has a 999.9/1000 gold purity (.9999 fineness)?

ACI Dealing Certificate-Part A

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