Question 1

If you sell USD 3-month forward to a client against EUR, what should you do to hedge your position?

Accepted Answer

A)  Buy USD spot, and buy and sell a 3-month EUR/USD FX swap 
B)  Sell EUR/USD in the spot market, borrow EUR for 3 months and lend USD for 3 months 
C)  Sell a 3-month EUR/USD outright forward 
D)  Any of the above 
A)  Buy USD spot, and buy and sell a 3-month EUR/USD FX swap 
B)  Sell EUR/USD in the spot market, borrow EUR for 3 months and lend USD for 3 months 
C)  Sell a 3-month EUR/USD outright forward 
D)  Any of the above

Question 2

What kind of information should dealers and brokers take care when relaying?

Accepted Answer

A)  Information that could be damaging to a third party 
B)  Unsubstantiated rumours 
C)  Unsubstantiated information that they suspect may be inaccurate and damaging to a third party 
D)  Price-sensitive information 
A)  Information that could be damaging to a third party 
B)  Unsubstantiated rumours 
C)  Unsubstantiated information that they suspect may be inaccurate and damaging to a third party 
D)  Price-sensitive information

Question 3

Experience has shown that recourse to taped telephone conversations proves invaluable to the speedy resolution of disputes. Therefore, the Model Code recommends:

Accepted Answer

A)  that all telephone conversations (internal and external) be taped without informing counterparties 
B)  that only conversations undertaken by dealers and brokers should be recorded 
C)  that all conversations undertaken by dealers and brokers should be recorded, together with back office telephone lines used by those responsible for confirming deals or passing payments to other institutions 
D)  that only telephone conversations between dealers and brokers be recorded 
A)  that all telephone conversations (internal and external) be taped without informing counterparties 
B)  that only conversations undertaken by dealers and brokers should be recorded 
C)  that all conversations undertaken by dealers and brokers should be recorded, together with back office telephone lines used by those responsible for confirming deals or passing payments to other institutions 
D)  that only telephone conversations between dealers and brokers be recorded

Question 4

Which of the following statements reflects the Model Code on gambling or betting amongst market participants?

Accepted Answer

A)  Gambling and betting between market participants should be strongly discouraged. 
B)  Gambling and betting between market participants can be allowed if it is monitored by management. 
C)  Gambling and betting between market participants should be forbidden. 
D)  All of the above. 
A)  Gambling and betting between market participants should be strongly discouraged. 
B)  Gambling and betting between market participants can be allowed if it is monitored by management. 
C)  Gambling and betting between market participants should be forbidden. 
D)  All of the above.

Question 5

Which of the following statements about the Net Stable Funding Ratio is correct?

Accepted Answer

A)  Assets are classified with an available stable funding factor (ASF). 
B)  Liabilities are classified with a required stable funding factor (RSF). 
C)  The ratio of available funding to required funding has to be higher than 50%n 
D)  Equity has an available stable funding factor of 100%. 
A)  Assets are classified with an available stable funding factor (ASF). 
B)  Liabilities are classified with a required stable funding factor (RSF). 
C)  The ratio of available funding to required funding has to be higher than 50%n 
D)  Equity has an available stable funding factor of 100%.

Question 6

EURODOLLAR futures are:

Accepted Answer

A)  Traded on the Chicago Mercantile Exchange (CME Group) and have a face value of USD 500,000.00 
B)  Traded on the Intercontinental Exchange (IC
E)  and have a face value of USD 1,000,000.00 
C)  Traded on the Intercontinental Exchange (IC
E)  and have a face value of USD 500,000.00 
D)  Traded on the Chicago Mercantile Exchange (CME Group) and have a face value of USD 1,000,000.00 
A)  Traded on the Chicago Mercantile Exchange (CME Group) and have a face value of USD 500,000.00 
B)  Traded on the Intercontinental Exchange (IC
E)  and have a face value of USD 1,000,000.00 
C)  Traded on the Intercontinental Exchange (IC
E)  and have a face value of USD 500,000.00 
D)  Traded on the Chicago Mercantile Exchange (CME Group) and have a face value of USD 1,000,000.00

Question 7

What is one of the responsibilities of the Middle Office according to the Model Code?

Accepted Answer

A)  Sending settlement instructions 
B)  Investigating settlement discrepancies 
C)  Keeping a contact list of all back office staff of the bank's counterparties 
D)  Exchanging standard settlement instructions (SSIs) 
A)  Sending settlement instructions 
B)  Investigating settlement discrepancies 
C)  Keeping a contact list of all back office staff of the bank's counterparties 
D)  Exchanging standard settlement instructions (SSIs)

Question 8

The maturity of a straight 3-months deposit falls on Saturday, which happens to be the last day of the month. What is the actual deposit maturity date?

Accepted Answer

A)  The following Monday 
B)  Saturday 
C)  Sunday 
D)  The previous Friday 
A)  The following Monday 
B)  Saturday 
C)  Sunday 
D)  The previous Friday

Question 9

A 3-month (91-day) UK Treasury bill with a face value of GBP 50,000,000.00 is quoted at a yield of 4.25%. How much is the bill worth?

Accepted Answer

A)  GBP 47,875,000.00 
B)  GBP 49,462,847.22 
C)  GBP 49,470,205.48 
D)  GBP 49,475,760.27 
A)  GBP 47,875,000.00 
B)  GBP 49,462,847.22 
C)  GBP 49,470,205.48 
D)  GBP 49,475,760.27

Question 10

Which of the following is part of the typical scope of Asset Liability Management (ALM)?

Accepted Answer

A)  Selling distressed assets and investing in bank liabilities trading at distressed levels. 
B)  Making sure that fixed assets are depreciated according to the applicable tax code. 
C)  Planning the maturity structure and net funding requirements arising from banking book and trading book transactions. 
D)  Planning the liability structure and net funding requirements arising from trading book assets carried at amortized cost. 
A)  Selling distressed assets and investing in bank liabilities trading at distressed levels. 
B)  Making sure that fixed assets are depreciated according to the applicable tax code. 
C)  Planning the maturity structure and net funding requirements arising from banking book and trading book transactions. 
D)  Planning the liability structure and net funding requirements arising from trading book assets carried at amortized cost.

Question 11

What is the ISO code for the Argentine peso?

Accepted Answer

A)  ARP 
B)  ARS 
C)  ARA 
D)  AED 
A)  ARP 
B)  ARS 
C)  ARA 
D)  AED

Question 12

An option is:

Accepted Answer

A)  The right to buy or sell a commodity at a fixed price 
B)  The right to buy a commodity at a fixed price 
C)  The right but not the obligation to buy or sell a commodity at a fixed price 
D)  The right but not the obligation to buy a commodity at a fixed price 
A)  The right to buy or sell a commodity at a fixed price 
B)  The right to buy a commodity at a fixed price 
C)  The right but not the obligation to buy or sell a commodity at a fixed price 
D)  The right but not the obligation to buy a commodity at a fixed price

Question 13

Where voicemail equipment is used for the reporting and recording of off-premises transactions, voice mail should be:

Accepted Answer

A)  installed on secret number known only to the chief dealer 
B)  installed and located in the office of the head of compliance 
C)  installed and located in such a way that reported transactions cannot be subsequently erased without senior management approval. 
D)  securely saved by recordings that have to be stored for at least a twelve-month period 
A)  installed on secret number known only to the chief dealer 
B)  installed and located in the office of the head of compliance 
C)  installed and located in such a way that reported transactions cannot be subsequently erased without senior management approval. 
D)  securely saved by recordings that have to be stored for at least a twelve-month period

Question 14

Under Basel rules, what is the meaning of RWA?

Accepted Answer

A)  Risk Weighted Assets 
B)  Risk Weighted Average 
C)  Recovery Weighted Assets 
D)  Risk Weighted Adjustments 
A)  Risk Weighted Assets 
B)  Risk Weighted Average 
C)  Recovery Weighted Assets 
D)  Risk Weighted Adjustments

Question 15

From the following CAD rates: 1M (31-day) CAD deposit     0.95% 1x2 CAD (30-day) FRA     1.21% 2x3 CAD (31-day) FRA     2.01% Calculate the 3-month implied cash rate.

Accepted Answer

A)  1.42% 
B)  1.39% 
C)  2.01% 
D)  4.21% 
A)  1.42% 
B)  1.39% 
C)  2.01% 
D)  4.21%

Question 16

If you have created a 'synthetic asset' by buying and selling a USD/CHF swap, what have you done?

Accepted Answer

A)  Created an exposure to the CHF 
B)  Created an exposure to the USD 
C)  Switched a CI-IF asset temporarily into USD without taking currency risk 
D)  Switched a USD asset temporarily into CHF without taking currency risk 
A)  Created an exposure to the CHF 
B)  Created an exposure to the USD 
C)  Switched a CI-IF asset temporarily into USD without taking currency risk 
D)  Switched a USD asset temporarily into CHF without taking currency risk

Question 17

Repo is said to have "double indemnity" due to the creditworthiness of the counterparty and:

Accepted Answer

A)  A written legal agreement between the parties 
B)  The oversight of the transaction by the custodian of the collateral 
C)  The creditworthiness of the collateral 
D)  The right of close-out and set-off in an event of default 
A)  A written legal agreement between the parties 
B)  The oversight of the transaction by the custodian of the collateral 
C)  The creditworthiness of the collateral 
D)  The right of close-out and set-off in an event of default

Question 18

The spot/week repo rate for the 4.25% OAT 2015 is quoted to you at 2.35-38%. You buy bonds with a market value of EUR 3,295,500.00 through a sell/buy-back. The Repurchase Price is:

Accepted Answer

A)  EUR 3,297,004.19 
B)  EUR 3,297,005.86 
C)  EUR 3,297,025.09 
D)  EUR 3,296,985.23 
A)  EUR 3,297,004.19 
B)  EUR 3,297,005.86 
C)  EUR 3,297,025.09 
D)  EUR 3,296,985.23

Question 19

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 bank's system. 
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 bank's system. 
C)  Is accepted for senior dealers. 
D)  Is accepted for hedging transactions.

Question 20

What is the correct interpretation of a EUR 5,000,000.00 one-week VaR figure with a 99% confidence level?

Accepted Answer

A)  A loss of at least EUR 5,000,000.00 can be expected in 99 out of the next 100 weeks. 
B)  A loss of at most EUR 5,000,000.00 can be expected in 1 out of the next 100 weeks. 
C)  A loss of at most EUR 5,000,000.00 can be expected in 1 out of the next 100 days. 
D)  A loss of at least EUR 5,000,000.00 can be expected in 1 out of the next 100 weeks. 
A)  A loss of at least EUR 5,000,000.00 can be expected in 99 out of the next 100 weeks. 
B)  A loss of at most EUR 5,000,000.00 can be expected in 1 out of the next 100 weeks. 
C)  A loss of at most EUR 5,000,000.00 can be expected in 1 out of the next 100 days. 
D)  A loss of at least EUR 5,000,000.00 can be expected in 1 out of the next 100 weeks.

If you sell USD 3-month forward to a client against EUR, what should you do to hedge your position?

What kind of information should dealers and brokers take care when relaying?

Experience has shown that recourse to taped telephone conversations proves invaluable to the speedy resolution of disputes. Therefore, the Model Code recommends:

Which of the following statements reflects the Model Code on gambling or betting amongst market participants?

Which of the following statements about the Net Stable Funding Ratio is correct?

EURODOLLAR futures are:

What is one of the responsibilities of the Middle Office according to the Model Code?

The maturity of a straight 3-months deposit falls on Saturday, which happens to be the last day of the month. What is the actual deposit maturity date?

A 3-month (91-day) UK Treasury bill with a face value of GBP 50,000,000.00 is quoted at a yield of 4.25%. How much is the bill worth?

Which of the following is part of the typical scope of Asset Liability Management (ALM)?

What is the ISO code for the Argentine peso?

An option is:

Where voicemail equipment is used for the reporting and recording of off-premises transactions, voice mail should be:

Under Basel rules, what is the meaning of RWA?

From the following CAD rates: 1M (31-day) CAD deposit 0.95% 1x2 CAD (30-day) FRA 1.21% 2x3 CAD (31-day) FRA 2.01% Calculate the 3-month implied cash rate.

If you have created a 'synthetic asset' by buying and selling a USD/CHF swap, what have you done?

Repo is said to have "double indemnity" due to the creditworthiness of the counterparty and:

The spot/week repo rate for the 4.25% OAT 2015 is quoted to you at 2.35-38%. You buy bonds with a market value of EUR 3,295,500.00 through a sell/buy-back. The Repurchase Price is:

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

What is the correct interpretation of a EUR 5,000,000.00 one-week VaR figure with a 99% confidence level?

ACI Dealing Certificate-Part A

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Exam 2: ACI Dealing Certificate-Part B

If you sell USD 3-month forward to a client against EUR, what should you do to hedge your position?

What kind of information should dealers and brokers take care when relaying?

Experience has shown that recourse to taped telephone conversations proves invaluable to the speedy resolution of disputes. Therefore, the Model Code recommends:

Which of the following statements reflects the Model Code on gambling or betting amongst market participants?

Which of the following statements about the Net Stable Funding Ratio is correct?

EURODOLLAR futures are:

What is one of the responsibilities of the Middle Office according to the Model Code?

The maturity of a straight 3-months deposit falls on Saturday, which happens to be the last day of the month. What is the actual deposit maturity date?

A 3-month (91-day) UK Treasury bill with a face value of GBP 50,000,000.00 is quoted at a yield of 4.25%. How much is the bill worth?

Which of the following is part of the typical scope of Asset Liability Management (ALM)?

What is the ISO code for the Argentine peso?

An option is:

Where voicemail equipment is used for the reporting and recording of off-premises transactions, voice mail should be:

Under Basel rules, what is the meaning of RWA?

From the following CAD rates: 1M (31-day) CAD deposit 0.95% 1x2 CAD (30-day) FRA 1.21% 2x3 CAD (31-day) FRA 2.01% Calculate the 3-month implied cash rate.

If you have created a 'synthetic asset' by buying and selling a USD/CHF swap, what have you done?

Repo is said to have "double indemnity" due to the creditworthiness of the counterparty and:

The spot/week repo rate for the 4.25% OAT 2015 is quoted to you at 2.35-38%. You buy bonds with a market value of EUR 3,295,500.00 through a sell/buy-back. The Repurchase Price is:

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

What is the correct interpretation of a EUR 5,000,000.00 one-week VaR figure with a 99% confidence level?

ACI Dealing Certificate-Part A

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