Question 1

In the event that standard settlement instructions are provided by a third party, full authentication and authorization of those SSIs should be independently performed by?

Accepted Answer

A)  Sales I trading staff 
B)  Operations staff 
C)  Nostro staff 
D)  Front office staff

Question 2

From 2019 on the total capital requirement for banks under Basel III will be defined as:

Accepted Answer

A)  8% of RWA plus conservation buffer 
B)  10.5% of RWA plus conservation buffer 
C)  8% of RWA plus countercyclical buffer 
D)  10.5% of RWA plus countercyclical buffer

Question 3

You request use of funds from your agent bank for 1 day on an amount of EUR 100,000,000.00, EONIA was 0.812% and the ECB deposit facility rate is 0.50%. What use of funds settlement amount should you expect?

Accepted Answer

A)  EUR 1,388,89 
B)  EUR 1,561.11 
C)  EUR 2,255.56 
D)  EUR 2,951.39

Question 4

A Eurodollar futures price of 99.685 implies:

Accepted Answer

A)  A forward-forward rate of 0.685% 
B)  A forward-forward rate of 0.315% 
C)  Current 3-month LIBOR of 0.6850% 
D)  Current 3-month LIBOR of 0.3150%

Question 5

In spite of having agreed to a deal, dealers are not bound to the deal if it is subject to documentation. The Model Code:

Accepted Answer

A)  Does not regard this as a good practice. 
B)  Urge dealers to be bear this in mind, as this is common practice for capital market deals. 
C)  Does not comment on this matter. 
D)  Recommends that national ACI Associations deal with this according to their local customs.

Question 6

Three of the following non-EU countries have unilaterally adopted the Euro. Which one has not?

Accepted Answer

A)  Kosovo 
B)  Andorra 
C)  Albania 
D)  Montenegro

Question 7

A customer gives you GBP 25,000,000.00 at 0.625% same day for 7 days. Through a broker, you place the funds with a bank for the same period at 0.6875%. Brokerage is charged at 2 basis points per annum. What is the net profit or loss on the deal?

Accepted Answer

A)  ProfitofGBP 299.66 
B)  Profit of GBP 203.77 
C)  LossofGBP299.66 
D)  Loss ofGBP 203.77

Question 8

Dealers are allowed to trade for their own account if:

Accepted Answer

A)  The dealers have good track records in their dealing both for the institution and for themselves. 
B)  There has been no previous conflicts of interest in the dealing room. 
C)  There is a clearly laFd down policy. 
D)  The dealers see no conflict of Interest in such dealing.

Question 9

You quote a price to a broker. It is hit by another bank, but you are not informed until some time afterward that the deal has been done. Who is to blame?

Accepted Answer

A)  You are, as it is your responsibility to check periodically that the price has not been dealt upon. 
B)  The broker is, as he must immediately tell you that your price has been dealt upon. 
C)  The other bank is, since it did not immediately seek confirmation. 
D)  All the parties, particularly you and the other bank.

Question 10

Risk capital is intended to ensure that an institution can:

Accepted Answer

A)  Survive a liquidity crisis 
B)  Absorb credit losses 
C)  Absorb any type of unexpected loss 
D)  Absorb any type of expected loss

Question 11

What would happen to a bank's net interest income if it ran a zero gap in an environment of decreasing interest rates?

Accepted Answer

A)  Net interest income would increase slightly. 
B)  Net interest income would increase considerably. 
C)  Net interest income would decrease. 
D)  Net interest income would hardly change at all.

Question 12

The rho of an option is:

Accepted Answer

A)  The sensitivity of the option value to changes in interest rates 
B)  The sensitivity of the option value to changes in volatility 
C)  The sensitivity of the option value to changes in the time to expiry 
D)  The sensitivity of the option value to changes in the price of the underlying

Question 13

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

Accepted Answer

A)  Credit institution 
B)  Investment bank 
C)  Discount house 
D)  Corporate

Question 14

When would an exporter commonly use an NDF?

Accepted Answer

A)  when receiving THB in 1 month 
B)  when receiving HKD in 2 months 
C)  when receiving PHP in 2 bank business days 
D)  when receiving KRW in 3 months

Question 15

Using reprising gap analysis, a bank's balance sheet is considered liability-sensitive to market interest rate changes, if:

Accepted Answer

A)  more liabilities than assets will be reprised in the near term 
B)  more assets than liabilities will be reprised in the near term 
C)  more assets than liabilities have variable rates or short residual maturities 
D)  non-interest bearing liabilities are greater than non-interest bearing assets

Question 16

How much is one big figure worth per million of base currency if EUR/GBP is 0.8990?

Accepted Answer

A)  GBP 10,000.00 
B)  EUR 10,000.00 
C)  GBP 8,990.00 
D)  EUR 8,990.00

Question 17

What is an FX swap?

Accepted Answer

A)  An exchange ot two streams of interest payments in different currencies and an exchange of the principal amounts of those currencies at maturity 
B)  A spot sale (purchase) and a forward purchase (sale) of two currencies agreed simultaneously between two parties 
C)  An exchange of currencies on a date beyond spot and at a price fixed today 
D)  None of the above

Question 18

Four banks provide you with quotes in CHF/SEK. Which is the best price for you to buy SEK?

Accepted Answer

A)  6.5825 
B)  6.5820 
C)  6.5815 
D)  6.5830

Question 19

If EUR/USD is 1.3025-28 and the 6-month swap is 15.50/17, what is the 6-month outright price?

Accepted Answer

A)  1.3042-1.30435 
B)  1.30405-1.3045 
C)  1.30095-1.3011 
D)  1.4575- 1.4728

Question 20

The market is quoting: 1-month (31-day) NOK     1.75¡ãk 3-month (91-day) NOK     2.05% What is the 1x3 rate in NOK?

Accepted Answer

A)  4.261% 
B)  2.202% 
C)  1.900% 
D)  1.592%

Exam 2: ACI Dealing Certificate-Part B