Question 1

Under Basel rules the risk weight for claims on unrated sovereigns and their cennl banks in the standardized approach is:

Accepted Answer

A)  75% 
B)  100% 
C)  150% 
D)  350% 
A)  75% 
B)  100% 
C)  150% 
D)  350%

Question 2

What is a short strangle option strategy?

Accepted Answer

A)  A short call option + long put option with a higher strike price than the call option 
B)  A long call option + long put option with a lower strike price than the call option 
C)  A short call option + short put option with a lower strike price than the call option 
D)  A long call option + long put option with higher strike price than the call option 
A)  A short call option + long put option with a higher strike price than the call option 
B)  A long call option + long put option with a lower strike price than the call option 
C)  A short call option + short put option with a lower strike price than the call option 
D)  A long call option + long put option with higher strike price than the call option

Question 3

Which of the following pays a return in the form of a discount to face value?

Accepted Answer

A)  Treasury bill 
B)  CD 
C)  Interbank deposit 
D)  Classic repo 
A)  Treasury bill 
B)  CD 
C)  Interbank deposit 
D)  Classic repo

Question 4

A 12-month EUR/USD swap is quoted at 41/44. EUR interest rates are expected to fall, with USD interest rates 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 28/31 
C)  Move towards 5 7/60 
D)  Insufficient information 
A)  Unchanged 
B)  Move towards 28/31 
C)  Move towards 5 7/60 
D)  Insufficient information

Question 5

A prime broker may not reject a trade given up if:

Accepted Answer

A)  the trade is not within the specified tenor limits 
B)  the trade is not within the specified credit limits 
C)  the trade details provided by the executing dealer and the client match 
D)  the trade is a permitted transaction type as specified in the give-up agreement with the executing dealer 
A)  the trade is not within the specified tenor limits 
B)  the trade is not within the specified credit limits 
C)  the trade details provided by the executing dealer and the client match 
D)  the trade is a permitted transaction type as specified in the give-up agreement with the executing dealer

Question 6

You bought a CAD 8,000,000.00 6x9 FRA at 1.95%. The settlement rate is 3-month (90-day) BBA LIBOR, which is fixed at 0.9500%. What is the settlement amount at maturity?

Accepted Answer

A)  You pay CAD 20,000.00 
B)  You receive CAD 20,000.00 
C)  You pay CAD 19,952.61 
D)  You receive CAD 19,952.61 
A)  You pay CAD 20,000.00 
B)  You receive CAD 20,000.00 
C)  You pay CAD 19,952.61 
D)  You receive CAD 19,952.61

Question 7

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

Question 8

The Model Code stipulates that you have a right to qualify your quotes in terms of amounts:

Accepted Answer

A)  if you do so when you make the price 
B)  provided the amounts are marketable 
C)  once you have discovered the name of the counterparty for credit reasons 
D)  at anytime 
A)  if you do so when you make the price 
B)  provided the amounts are marketable 
C)  once you have discovered the name of the counterparty for credit reasons 
D)  at anytime

Question 9

If a dealer has interest on one side, and the other side is dealt away, the broker should:

Accepted Answer

A)  Immediately put the price "under reference" and check with the dealer to ascertain his original intention. 
B)  Cancel the order. 
C)  Continue with the order. 
D)  None of the above. 
A)  Immediately put the price "under reference" and check with the dealer to ascertain his original intention. 
B)  Cancel the order. 
C)  Continue with the order. 
D)  None of the above.

Question 10

Who takes the counterparty risk on the seller in a to-party repo?

Accepted Answer

A)  The buyer 
B)  The to-party agent 
C)  A third-party guarantor 
D)  A central clearing counterparty 
A)  The buyer 
B)  The to-party agent 
C)  A third-party guarantor 
D)  A central clearing counterparty

Question 11

The seller of a call option has:

Accepted Answer

A)  Substantial opportunity for gain and limited risk of loss 
B)  Substantial risk of loss and substantial opportunity for gain 
C)  Limited risk of loss and limited opportunity for gain 
D)  Substantial risk of loss and limited opportunity for gain 
A)  Substantial opportunity for gain and limited risk of loss 
B)  Substantial risk of loss and substantial opportunity for gain 
C)  Limited risk of loss and limited opportunity for gain 
D)  Substantial risk of loss and limited opportunity for gain

Question 12

Which statement about modern matched-maturity transfer pricing in banks is correct?

Accepted Answer

A)  It is now a widely accepted standard that banks should use a single representative transfer price across the entire maturity spectrum. 
B)  Modern matched-maturity pricing systems include an additional liquidity surcharge that is specifically applied to more liquid short maturities. 
C)  Matched-maturity transfer prices should represent a weighted average cost of capital that incorporates the cost of equity into the cost of borrowed funds. 
D)  Modern matched-maturity systems differentiate transfer prices by the maturity of the commitment and also apply a marginal funding cost perspective. 
A)  It is now a widely accepted standard that banks should use a single representative transfer price across the entire maturity spectrum. 
B)  Modern matched-maturity pricing systems include an additional liquidity surcharge that is specifically applied to more liquid short maturities. 
C)  Matched-maturity transfer prices should represent a weighted average cost of capital that incorporates the cost of equity into the cost of borrowed funds. 
D)  Modern matched-maturity systems differentiate transfer prices by the maturity of the commitment and also apply a marginal funding cost perspective.

Question 13

Spot EUR/USD is 1.3050-53 and EUR interest rates are lower than USD interest rates. Would you expect the forward points for EUR/USD to be:

Accepted Answer

A)  added to spot 
B)  subtracted from spot 
C)  a negative value 
D)  Insufficient information to decide 
A)  added to spot 
B)  subtracted from spot 
C)  a negative value 
D)  Insufficient information to decide

Question 14

A bank that has quoted a firm price is obliged to deal:

Accepted Answer

A)  At that price. 
B)  At that price in a marketable amount. 
C)  At that price in a marketable amount with an acceptable name. 
D)  At that price in a marketable amount with an acceptable name and provided the market price has not moved excessively. 
A)  At that price. 
B)  At that price in a marketable amount. 
C)  At that price in a marketable amount with an acceptable name. 
D)  At that price in a marketable amount with an acceptable name and provided the market price has not moved excessively.

Question 15

The mid-rate for USD/CHF is 0.9300 and the mid-rate for NZD/USD is 0.8560. What is the mid rate for NZD/CHF?

Accepted Answer

A)  0.7961 
B)  1.0864 
C)  1.7860 
D)  1.2561 
A)  0.7961 
B)  1.0864 
C)  1.7860 
D)  1.2561

Question 16

Cable is quoted at 1.5575-80 and you say "5 yours!" to the broker. What have you done?

Accepted Answer

A)  Sold USD 5,000,000.00 at 1.5575 
B)  Sold GBP 5,000,000.00 at 1.5575 
C)  Bought GBP 5,000,000.00 at 1.5580 
D)  Bought USD 5,000,000.00 at 1.5580 
A)  Sold USD 5,000,000.00 at 1.5575 
B)  Sold GBP 5,000,000.00 at 1.5575 
C)  Bought GBP 5,000,000.00 at 1.5580 
D)  Bought USD 5,000,000.00 at 1.5580

Question 17

The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75- 80%. As collateral, you are offered EUR 25,000,000.00 nominal of the 5.5% OAT April 2015, which is worth EUR 28,137,500.00. If you impose an initial margin of 1%, the Repurchase Price is:

Accepted Answer

A)  EUR 27,947,276.43 
B)  EUR 27,946,077.08 
C)  EUR 27,950,071.43 
D)  EUR 27,948,871.97 
A)  EUR 27,947,276.43 
B)  EUR 27,946,077.08 
C)  EUR 27,950,071.43 
D)  EUR 27,948,871.97

Question 18

Which of the following statements is true?

Accepted Answer

A)  Banks should not ask brokers to disclose details of third party transactions unless they are between overseas principals. 
B)  Banks should not ask brokers to disclose details of third party transactions unless these transactions are already settled. 
C)  Banks should not ask brokers to disclose transactions between third parties in any circumstances. 
D)  Banks should not ask brokers for details of third party transactions unless senior management has approved. 
A)  Banks should not ask brokers to disclose details of third party transactions unless they are between overseas principals. 
B)  Banks should not ask brokers to disclose details of third party transactions unless these transactions are already settled. 
C)  Banks should not ask brokers to disclose transactions between third parties in any circumstances. 
D)  Banks should not ask brokers for details of third party transactions unless senior management has approved.

Question 19

What is the name of the reference against which most USD and JPY deposits and loans are fixed in London?

Accepted Answer

A)  EURIBOR 
B)  EONIA 
C)  LIBOR 
D)  SONIA 
A)  EURIBOR 
B)  EONIA 
C)  LIBOR 
D)  SONIA

Question 20

What should be done when a voice broker hits a dealer's price as "done" at the very instant the dealer calls "off"?

Accepted Answer

A)  The deal should not be concluded and the broker should inform both counterparties accordingly. 
B)  The transaction should be concluded and the broker should inform both counterparties accordingly. 
C)  The broker should immediately inform both counterparties that the deal will have to be renegotiated. 
D)  The broker should decide whether the transaction is concluded or not and inform both counterparties accordingly. 
A)  The deal should not be concluded and the broker should inform both counterparties accordingly. 
B)  The transaction should be concluded and the broker should inform both counterparties accordingly. 
C)  The broker should immediately inform both counterparties that the deal will have to be renegotiated. 
D)  The broker should decide whether the transaction is concluded or not and inform both counterparties accordingly.

Under Basel rules the risk weight for claims on unrated sovereigns and their cennl banks in the standardized approach is:

What is a short strangle option strategy?

Which of the following pays a return in the form of a discount to face value?

A 12-month EUR/USD swap is quoted at 41/44. EUR interest rates are expected to fall, with USD interest rates remaining stable. Assuming no change in the spot rate what effect would you expect on the forward points?

A prime broker may not reject a trade given up if:

You bought a CAD 8,000,000.00 6x9 FRA at 1.95%. The settlement rate is 3-month (90-day) BBA LIBOR, which is fixed at 0.9500%. What is the settlement amount at maturity?

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

The Model Code stipulates that you have a right to qualify your quotes in terms of amounts:

If a dealer has interest on one side, and the other side is dealt away, the broker should:

Who takes the counterparty risk on the seller in a to-party repo?

The seller of a call option has:

Which statement about modern matched-maturity transfer pricing in banks is correct?

Spot EUR/USD is 1.3050-53 and EUR interest rates are lower than USD interest rates. Would you expect the forward points for EUR/USD to be:

A bank that has quoted a firm price is obliged to deal:

The mid-rate for USD/CHF is 0.9300 and the mid-rate for NZD/USD is 0.8560. What is the mid rate for NZD/CHF?

Cable is quoted at 1.5575-80 and you say "5 yours!" to the broker. What have you done?

The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75- 80%. As collateral, you are offered EUR 25,000,000.00 nominal of the 5.5% OAT April 2015, which is worth EUR 28,137,500.00. If you impose an initial margin of 1%, the Repurchase Price is:

Which of the following statements is true?

What is the name of the reference against which most USD and JPY deposits and loans are fixed in London?

What should be done when a voice broker hits a dealer's price as "done" at the very instant the dealer calls "off"?

ACI Dealing Certificate-Part A

Filters

Exam 2: ACI Dealing Certificate-Part B

Under Basel rules the risk weight for claims on unrated sovereigns and their cennl banks in the standardized approach is:

What is a short strangle option strategy?

Which of the following pays a return in the form of a discount to face value?

A 12-month EUR/USD swap is quoted at 41/44. EUR interest rates are expected to fall, with USD interest rates remaining stable. Assuming no change in the spot rate what effect would you expect on the forward points?

A prime broker may not reject a trade given up if:

You bought a CAD 8,000,000.00 6x9 FRA at 1.95%. The settlement rate is 3-month (90-day) BBA LIBOR, which is fixed at 0.9500%. What is the settlement amount at maturity?

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

The Model Code stipulates that you have a right to qualify your quotes in terms of amounts:

If a dealer has interest on one side, and the other side is dealt away, the broker should:

Who takes the counterparty risk on the seller in a to-party repo?

The seller of a call option has:

Which statement about modern matched-maturity transfer pricing in banks is correct?

Spot EUR/USD is 1.3050-53 and EUR interest rates are lower than USD interest rates. Would you expect the forward points for EUR/USD to be:

A bank that has quoted a firm price is obliged to deal:

The mid-rate for USD/CHF is 0.9300 and the mid-rate for NZD/USD is 0.8560. What is the mid rate for NZD/CHF?

Cable is quoted at 1.5575-80 and you say "5 yours!" to the broker. What have you done?

The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75- 80%. As collateral, you are offered EUR 25,000,000.00 nominal of the 5.5% OAT April 2015, which is worth EUR 28,137,500.00. If you impose an initial margin of 1%, the Repurchase Price is:

Which of the following statements is true?

What is the name of the reference against which most USD and JPY deposits and loans are fixed in London?

What should be done when a voice broker hits a dealer's price as "done" at the very instant the dealer calls "off"?

ACI Dealing Certificate-Part A

Filters