3I0-012 Exam Training Practice Tests (ACI Dealing Certificate)]

Question 1

The 180-day CAD/CHF rate is bid 62 and the 90-day CAD/CHF rate is bid 29. What is the bid rate for 120 days, assuming straight-line interpolation?

A. 42 B. 27 C. 33 D. 40

Correct Answer: D

Question 2

Which one of the following statements about claims is true?

A. Claims are not expected to be submitted after 15 days from the actual settlement date. B. Acknowledgement of receipt of a claim should be confirmed within 48 hours by email or SWIFT. C. Claims are calculated on the full principal amount of the failed transaction. Interest rates are imposed by the agent banks, unless a higher negotiated rate is to be applied. D. Claims of less than USD 5,000.00 are not expected to be submitted.

Correct Answer: C

Question 3

What is a master agreement intended to do?

A. Describe the parameters of a dealing relationship B. Set out the rights and obligations of two parties C. All of the above D. Apply to all transactions between two parties

Correct Answer: C

Question 4

Which of the following is a Model Code good practice regarding the passing of names?

A. Brokers may divulge the names of principals prematurely to induce a counterparty to transact. B. Dealers should never give brokers guidance on the extent of their price differentiation across broad categories of counterparties. C. Bank dealers should, wherever possible, give brokers prior indication of counterparties with whom they would be unwilling to do business. D. When a principal's name proves unacceptable to another principal, the broker is bound to divulge who refused it.

Correct Answer: C

Question 5

The "spot basis" of a 2 against 4 months EUR/USD forward/forward swap is:

A. usually the current spot EUR/USD mid-market rate B. always the forward EUR/USD bid rate of the first swap leg C. commonly the prevailing 4-month forward EUR/USD mid-rate D. generally the prevailing 2-month forward EUR/USD mid-rate

Correct Answer: D

Question 6

The risk associated with a stock or a bond that is not correlated with events in the market is known as:

A. currency risk B. specific risk C. model risk D. interest rate risk

Correct Answer: B

Question 7

If EUR/USD is quoted to you as 1.3050-53, does this price represent?

A. Depends on whether the price is being quoted in Europe or the US B. The number of EUR per USD C. The number of USD per EUR D. Depends on whether the price is being quoted interbank or to a customer

Correct Answer: C

Question 8

How many USD would you have to invest at 3.5% to be repaid USD125 million (principal plus interest) in 30 days?

A. USD 124,641,442.43 B. USD 124,636,476.94 C. USD 124,635,416.67 D. USD 123,915,737.30

Correct Answer: B

Question 9

Is gambling or betting between market participants allowed?

A. Although not prohibited, it is strongly discouraged. B. Yes, it is allowed if no money is involved. C. It is allowed for purposes of charity. D. Yes, it is allowed for sporting events.

Correct Answer: A

Question 10

Which of the following statements does not explain why banks accept some amount of interest rate risk?

A. Banks prefer c red it risk to market risk. B. Banks incur interest rate risk to increase income C. If banks failed to take on interest rate risk they would not be able to meet the needs of their deposit and loan customers. D. In their function as intermediaries, banks must necessarily accept some degree of interest rate risk.

Correct Answer: A

Question 11

Selling a FRA has the same interest rate exposure as:

A. Opening a positive gap B. Making a forward-forward loan C. Taking a forward-forward deposit D. Going over-borrowed

Correct Answer: B

Question 12

Which of the following situations would be most likely to result in a negative mark-to-market for a bank borrowing short term and lending long term?

A. if the yield curve is inverted B. if the yield curve becomes steeper C. if there is a downward parallel shift in the yield curve D. credit spread tightening of the long term position

Correct Answer: B

ACI Dealing Certificate - 3I0-012 Exam Practice Test