Question 1

If the value date of forward USD/JPY transactions is declared a holiday in either New York or Tokyo, the correct value date will be:

Accepted Answer

A)  The value date of the centre which is open. 
B)  The next business day of the centre which is close 
C)  The next business day when both New York and Tokyo 
D)  None of the above.

Question 2

When a broker makes an error on payment instructions The Model Code recommends that:

Accepted Answer

A)  The broker remains liable for the resulting differ 
B)  The broker remains liable until the error is disco 
C)  The broker is not liable at all. 
D)  The broker's liability should be limited as he is

Question 3

If a broker refers to "the payer of 5- year euro at 4.12", what is this party doing?

Accepted Answer

A)  Paying a fixed rate of 4.12% per annum on a 30/360 
B)  Paying a fixed rate of 4.12% per annum on an actua 
C)  Paying a 5-year euro deposit and receiving a rate 
D)  Taking a 5-year euro deposit and paying a rate of

Question 4

A disgruntled customer claims that he should not have to settle an FRA with you because it is really just a wager. What type of risk are you exposed to?

Accepted Answer

A)  Credit risk 
B)  Legal risk 
C)  Settlement risk 
D)  Basis risk

Question 5

The Chairman and members of the ACIs Committee for Professionalism are ready to assist in resolving disputes through the ACIs Expert Determination Service in situations where:

Accepted Answer

A)  The amount of the deal exceeds EUR 5 million. 
B)  The local regulator or central bank declines to in 
C)  Litigation has already commenced. 
D)  At the request of one of the counterparties.

Question 6

A 7-day piece of USCP is quoted at a rate of discount of 1.75%. What is its true yield?

Accepted Answer

A)  1.73% 
B)  1.75% 
C)  1.77% 
D)  1.80%

Question 7

Bank XYZ calls you for a quote in EUR/USD for EURO 20 million. If you decide to quote to Bank XYZ:

Accepted Answer

A)  You must be prepared to deal up to EUR 20 million. 
B)  You may quote without stating the amount you are p 
C)  You are only committed to deal in a marketable amo 
D)  None of the above.

Question 8

The spot/next repo rate for the 5% bund 2006 is quoted to you at 1.75-80%. You sell bonds with a market value of EUR 5,798,692 through a sell/buy-back. The Repurchase Price is:

Accepted Answer

A)  EUR 5,798,982 
B)  EUR 5,799,497 
C)  EUR 5,746,376 
D)  EUR 5,000,694

Question 9

What is meant by "short dates"?

Accepted Answer

A)  Maturities of less than one week. 
B)  Maturities of less than one month. 
C)  Maturities of less than one year. 
D)  Maturities in the same calendar month.

Question 10

Which of the following are quoted in terms of a yield-to-maturity?

Accepted Answer

A)  USCP 
B)  ECP 
C)  Treasury bill 
D)  BA

Question 11

The use of off-market rates is discouraged and should be permitted only:

Accepted Answer

A)  When the bank's income is secured on the trade. 
B)  If the unsecured credit is taken into account. 
C)  If the bank knows the customer very well. 
D)  When there are written procedures and policies for

Question 12

A CD can usually only be issued by what type of institution?

Accepted Answer

A)  Credit institution 
B)  Investment bank 
C)  Discount house 
D)  All of the above

Question 13

For which countrys currency is ZAR the ISO code?

Accepted Answer

A)  Saudi Arabia 
B)  South Africa 
C)  Zimbabwe 
D)  Zambia

Question 14

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 in 
B)  The dealer should make his intention to assign cle 
C)  The dealer should agree the method of assignment b 
D)  The counterparty should specify whether or not ass

Question 15

When a stop-loss/profit order is taken, the rate specified in the order:

Accepted Answer

A)  Must be transacted regardless of where the market 
B)  Must be transacted if a broker confirms that the r 
C)  Cannot be taken as a fixed-price guarantee. 
D)  None of the above.

Question 16

What is EONIA?

Accepted Answer

A)  Volume-weighted average overnight EUR deposit rate 
B)  Volume-weighted average overnight EUR LIBOR 
C)  Arithmetic average overnight EUR deposit rate 
D)  ECB overnight lending rate

Question 17

A futures clearing house is:

Accepted Answer

A)  The buyer to each seller and the seller to each bu 
B)  A clearing agent only 
C)  The self-regulatory organisation for the futures e 
D)  The owner of the futures exchange

Question 18

Bank B's price is shown by a broker

Accepted Answer

A)  Bank A can call Bank B directly. 
B)  Bank A should wait 10 minutes before calling Bank 
C)  Bank A cannot increase the amount. 
D)  Bank A should go back to the broker .

Question 19

Borrowing USD for 12 months and lending them for 6 months (means that you are making):

Accepted Answer

A)  Forward-forward loan 
B)  Forward-forward deposit 
C)  Negative gap 
D)  An over-lent position

Question 20

When quoting the exchange rate between the EUR and AUD, which is conventionally the base currency?

Accepted Answer

A)  EUR 
B)  AUD 
C)  Depends on whether the price is being quoted in Eu 
D)  Depends on whether the price is being quoted inter

Exam 1: ACI Dealing Certificate-Part A