3I0-010 Exam Training Practice Tests (ACI

Question 1

Which kind of report is a reconciliation system unable to produce?

A. An "unmatched items report" (a report of items for which one is unable to find matches) B. A "calculated fees report" (a report of the expected fees owed) C. A "probable matched items report" (a report in which most fields match but there are some discrepancies) D. A "matched items report" (a report of all fields that match)

Correct Answer: B

Question 2

What is the purpose of "internal cash reconciliation"?

A. cash forecasting, cash collateral and cash positions control B. to control the banks cash and derivative positions C. to reconcile and control the cash balance for the central bank D. to reconcile and control the cash balance for the Bank for International Settlements (BIS)

Correct Answer: A

Question 3

The "value date" is best described as:

A. The date the settlement occurs B. The date confirmations are exchanged between counterparties C. The date the fixing rate is agreed upon D. The date a trade is undertaken

Correct Answer: A

Question 4

EURIBOR is a:

A. a rate used for the settlement of USD FRAs between European counterparties B. daily fixing of EUR interest rates in London C. the official successor to LIBOR rates D. daily fixing of EUR interest rates within the EMU zone

Correct Answer: D

Question 5

Settlement prices on futures contracts are

A. official prices calculated by the central bank where the stock exchange is located B. official prices calculated by a panel of central banks C. official prices calculated by the exchange at the close of trading for the purpose of making margin calculations D. never used

Correct Answer: C

Question 6

For futures contracts quoted on an exchange:

A. the initial margin is a predetermined fraction of maintenance margin B. the maintenance margin is a predetermined fraction of initial margin C. the maintenance margin represents management fees D. the maintenance margin represents the brokerage costs

Correct Answer: B

Question 7

Which of the following is characteristic of derivative instruments?

A. derivates are bought and sold only over the counter (OTC) B. the final settlement of a derivates trade can only be made by physical delivery C. trades are executed in nominal amounts D. the accounting for derivative instruments is off balance sheet

Correct Answer: D

Question 8

What is a junk bond?

A. a bond typically paying lower yields than an investment grade instrument B. a sub-investment grade instrument C. an AAA-rated security in payment default D. an OECD Government bond

Correct Answer: B

Question 9

What are the value dates of a tom next money market trade dealt Friday, 13 August?

A. 16 August 17 August B. 13 August 16 August C. 17 August 18 August D. 13 August 17 August

Correct Answer: A

Question 10

What is an essential feature of nostro reconciliations?

A. that open items are booked on an internal account B. that they are performed in a timely and efficient way C. that they are performed before the next business day D. that a daily nostro reconciliation report is sent out to the correspondent bank

Correct Answer: B

Question 11

All trades, internal and external, should be entered into trade capture systems:

A. the same day they are executed B. within 24 hours of execution C. as soon as possible D. within an hour of execution

Correct Answer: C

Question 12

What is volatility?

A. the measure of the liquidity of a contract or security B. the difference between the annual high and low of a security C. a statistical measure of price fluctuations as an annualized percentage D. the difference between the current price of an asset and its previous close

Correct Answer: C

Question 13

What are the principal functionalities of interbank funds transfer systems?

A. the transfer of information and settlement B. the matching of confirmations C. the dealing and archiving of payment orders D. reconciliation and correspondent banking

Correct Answer: A

Question 14

A plain vanilla interest rate swap is:

A. an agreement to borrow and lend one currency for another at two different value dates B. two floating rate legs on different indexes C. a fixed rate leg in one currency and a fixed rate leg in another currency D. an agreement to exchange one stream of interest payments for another (fixed against floating)

Correct Answer: D

Question 15

If you execute a sale of bonds, and the securities have not been delivered 2 days after you have received payment on the agreed settlement date, which of the following is correct:

A. you have no debt to the counterparty B. the counterparty has a debt to you C. the counterparty will have to pay at least 2 days of interest charges on top of the coupon D. you will have to pay at least 2 days of funding costs on top of the coupon

Correct Answer: D

ACI - Operations Certificate - 3I0-010 Exam Practice Test