Question 1

If manual trade capture methods are used, when should deals be recorded in systems used for this purpose?

Accepted Answer

A)  The same day they are dealt 
B)  Promptly 
C)  Within 24 hours of execution 
D)  Within an hour of execution 
A)  The same day they are dealt 
B)  Promptly 
C)  Within 24 hours of execution 
D)  Within an hour of execution

Question 2

A forward/forward FX swap:

Accepted Answer

A)  is a contract by which the maturity of a regular FX swap can be extended at an historic (noncurrent) rate 
B)  is a swap transaction where the near leg is traded either value today or value tomorrow and the far leg is traded spot 
C)  is a swap that does not start spot and where both the near and the far leg are traded forward 
D)  is a transaction by which a maturing outright forward FX is prolonged at an historic (non-current) rate 
A)  is a contract by which the maturity of a regular FX swap can be extended at an historic (noncurrent) rate 
B)  is a swap transaction where the near leg is traded either value today or value tomorrow and the far leg is traded spot 
C)  is a swap that does not start spot and where both the near and the far leg are traded forward 
D)  is a transaction by which a maturing outright forward FX is prolonged at an historic (non-current) rate

Question 3

When considering interest rate risk in the banking book, retail demand deposits without fixed contractual maturity:

Accepted Answer

A)  should be assumed to have zero duration 
B)  should be treated like other instantly variable rate liabilities, such as overnight money market borrowing. 
C)  should be assumed to have a low correlation with money market reference rates 
D)  represent a minor contributor to interest rate risk and can safely be disregarded 
A)  should be assumed to have zero duration 
B)  should be treated like other instantly variable rate liabilities, such as overnight money market borrowing. 
C)  should be assumed to have a low correlation with money market reference rates 
D)  represent a minor contributor to interest rate risk and can safely be disregarded

Question 4

You have quoted spot USD/CHF at 0.9423-26. Your customer says "I take 5". What does he mean?

Accepted Answer

A)  He buys CHF 5,000,000.00 at 0.9423 
B)  He buys CHF 5,000,000.00 at 0.9426 
C)  He buys USD 5,000,000.00 at 0.9423 
D)  He buys USD 5,000,000.00 at 0.9426 
A)  He buys CHF 5,000,000.00 at 0.9423 
B)  He buys CHF 5,000,000.00 at 0.9426 
C)  He buys USD 5,000,000.00 at 0.9423 
D)  He buys USD 5,000,000.00 at 0.9426

Question 5

You hear from a client of good standing that a major market participant has taken major losses on its proprietary trading book and is desperate for liquidity. You are not convinced that the story is true, but have a friend at another bank who you know has very large exposures to this firm and would be seriously damaged by a default. What advice does the Model Code give?

Accepted Answer

A)  Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should not be passed on in any circumstances. 
B)  Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should be discussed only with great care. 
C)  Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should be reported to the regulator in order to provide warning of possible systemic problems. 
D)  You have a duty to warn counterparties but should make clear that the information is unsubstantiated. 
A)  Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should not be passed on in any circumstances. 
B)  Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should be discussed only with great care. 
C)  Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should be reported to the regulator in order to provide warning of possible systemic problems. 
D)  You have a duty to warn counterparties but should make clear that the information is unsubstantiated.

Question 6

When quoting the exchange rate between the USD and AUDI which is conventionally the base currency?

Accepted Answer

A)  USD 
B)  AUD 
C)  Depends on whether the price is being quoted in Australia or the US 
D)  Depends on whether the price is being quoted interbank or to a customer 
A)  USD 
B)  AUD 
C)  Depends on whether the price is being quoted in Australia or the US 
D)  Depends on whether the price is being quoted interbank or to a customer

Question 7

What is Model Codes recommendation on the settlement of dirrerences by "points"?

Accepted Answer

A)  It is not favoured. 
B)  It may be permitted when allowed by the local market regulator. 
C)  Itis unconditionally accepted bythe Code. 
D)  It is allowed only if senior management approval is obtained. 
A)  It is not favoured. 
B)  It may be permitted when allowed by the local market regulator. 
C)  Itis unconditionally accepted bythe Code. 
D)  It is allowed only if senior management approval is obtained.

Question 8

The market is quoting: 3-month (90-day) NZD     2.55% 6-month (182-day) NZD     2.75% What is the 3x6 rate in NZD?

Accepted Answer

A)  2.338% 
B)  2.650% 
C)  2.927% 
D)  2.992% 
A)  2.338% 
B)  2.650% 
C)  2.927% 
D)  2.992%

Question 9

Under Basel III the Credit Value Adjustment will apply to:

Accepted Answer

A)  bilaterally cleared ABS trades only 
B)  exchange traded derivatives only 
C)  derivatives cleared via a CCP 
D)  bilaterally settled OTC derivatives trades 
A)  bilaterally cleared ABS trades only 
B)  exchange traded derivatives only 
C)  derivatives cleared via a CCP 
D)  bilaterally settled OTC derivatives trades

Question 10

A dealer has been asked by a broker to go to an exclusive club for the third time in a week. He should:

Accepted Answer

A)  Agree. Entertainment is a normal part of business. 
B)  Refuse. This entertainment is excessive in value and frequency. 
C)  Agree but insist on paying halt the cost. 
D)  Refuse. Going back to the same club is clearly excessive entertainment. 
A)  Agree. Entertainment is a normal part of business. 
B)  Refuse. This entertainment is excessive in value and frequency. 
C)  Agree but insist on paying halt the cost. 
D)  Refuse. Going back to the same club is clearly excessive entertainment.

Question 11

In order to be introduced in a controlled manner, which areas should be involved before a new product or business strategy is launched?

Accepted Answer

A)  Product Control, Legal and Compliance, Front Office, Treasury and Operations 
B)  Senior management only 
C)  Front Office and Treasury Middle Office 
D)  All relevant areas 
A)  Product Control, Legal and Compliance, Front Office, Treasury and Operations 
B)  Senior management only 
C)  Front Office and Treasury Middle Office 
D)  All relevant areas

Question 12

How would you compute the bid side of the forward/forward FX swap points?

Accepted Answer

A)  bid side of the near leg swap points minus offered side of the far leg swap points 
B)  bid side of the far leg swap points minus offered side of the near leg swap points 
C)  offered side of the far leg swap points minus bid side of the near leg swap points 
D)  offered side of the near leg swap points minus bid side of the far leg swap points 
A)  bid side of the near leg swap points minus offered side of the far leg swap points 
B)  bid side of the far leg swap points minus offered side of the near leg swap points 
C)  offered side of the far leg swap points minus bid side of the near leg swap points 
D)  offered side of the near leg swap points minus bid side of the far leg swap points

Question 13

A USD deposit traded in London between two German banks is cleared:

Accepted Answer

A)  Wherever the parties agree 
B)  In London 
C)  In NewYork 
D)  In Frankfurt 
A)  Wherever the parties agree 
B)  In London 
C)  In NewYork 
D)  In Frankfurt

Question 14

Which of the following risks are considered market risks?

Accepted Answer

A)  interest rate, currency, equity and commodity risk 
B)  interest rate, currency, equity and default risk 
C)  interest rate, equity, liquidity and default risk 
D)  legal, reputation and regulatory risk 
A)  interest rate, currency, equity and commodity risk 
B)  interest rate, currency, equity and default risk 
C)  interest rate, equity, liquidity and default risk 
D)  legal, reputation and regulatory risk

Question 15

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

Accepted Answer

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

Question 16

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

Accepted Answer

A)  Gambling and betting amongst market participants should be strongly discouraged. 
B)  Gambling and betting amongst market participants may be permitted if management monitors it. 
C)  Gambling and betting amongst market participants should be prohibited. 
D)  Gambling and betting amongst market participants is only tolerated if it is previously reported to the CFP of the ACI. 
A)  Gambling and betting amongst market participants should be strongly discouraged. 
B)  Gambling and betting amongst market participants may be permitted if management monitors it. 
C)  Gambling and betting amongst market participants should be prohibited. 
D)  Gambling and betting amongst market participants is only tolerated if it is previously reported to the CFP of the ACI.

Question 17

Where the Committee for Professionalism of the ACI has been notified of a breach of the letter or spirit of the Model Code, it

Accepted Answer

A)  Will examine the complaint. 
B)  May consult with the local ACI. 
C)  Will bring the matter to the attention of the local regulator. 
D)  None of the above. 
A)  Will examine the complaint. 
B)  May consult with the local ACI. 
C)  Will bring the matter to the attention of the local regulator. 
D)  None of the above.

Question 18

What is the meaning of CCP within the Basel framework?

Accepted Answer

A)  Collateralized Clearing Process 
B)  Central Clearing Counterparty 
C)  Collateralized Counterparty Protection 
D)  Collateralized Credit Protection 
A)  Collateralized Clearing Process 
B)  Central Clearing Counterparty 
C)  Collateralized Counterparty Protection 
D)  Collateralized Credit Protection

Question 19

Which of the following is true about interest rate swaps (IRS):

Accepted Answer

A)  Both parties know what their future payments will be at the outset of the swap 
B)  There is payment of principal at maturity 
C)  Payments are always made gross 
D)  The fixed rate payer knows what his future payments will be at the outset of the swap 
A)  Both parties know what their future payments will be at the outset of the swap 
B)  There is payment of principal at maturity 
C)  Payments are always made gross 
D)  The fixed rate payer knows what his future payments will be at the outset of the swap

Question 20

A customer sells a 3-month Euro Swiss Franc (EUROSWISS) futures contract. Which of the following risks could he be trying to hedge?

Accepted Answer

A)  An increase in forward USD/CHF 
B)  Falling CI-IF interest rates 
C)  A decrease in forward USD/CHF 
D)  Rising CHF interest rates 
A)  An increase in forward USD/CHF 
B)  Falling CI-IF interest rates 
C)  A decrease in forward USD/CHF 
D)  Rising CHF interest rates

If manual trade capture methods are used, when should deals be recorded in systems used for this purpose?

A forward/forward FX swap:

When considering interest rate risk in the banking book, retail demand deposits without fixed contractual maturity:

You have quoted spot USD/CHF at 0.9423-26. Your customer says "I take 5". What does he mean?

When quoting the exchange rate between the USD and AUDI which is conventionally the base currency?

What is Model Codes recommendation on the settlement of dirrerences by "points"?

The market is quoting: 3-month (90-day) NZD 2.55% 6-month (182-day) NZD 2.75% What is the 3x6 rate in NZD?

Under Basel III the Credit Value Adjustment will apply to:

A dealer has been asked by a broker to go to an exclusive club for the third time in a week. He should:

In order to be introduced in a controlled manner, which areas should be involved before a new product or business strategy is launched?

How would you compute the bid side of the forward/forward FX swap points?

A USD deposit traded in London between two German banks is cleared:

Which of the following risks are considered market risks?

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

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

Where the Committee for Professionalism of the ACI has been notified of a breach of the letter or spirit of the Model Code, it

What is the meaning of CCP within the Basel framework?

Which of the following is true about interest rate swaps (IRS):

A customer sells a 3-month Euro Swiss Franc (EUROSWISS) futures contract. Which of the following risks could he be trying to hedge?

ACI Dealing Certificate-Part A

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Exam 2: ACI Dealing Certificate-Part B

If manual trade capture methods are used, when should deals be recorded in systems used for this purpose?

A forward/forward FX swap:

When considering interest rate risk in the banking book, retail demand deposits without fixed contractual maturity:

You have quoted spot USD/CHF at 0.9423-26. Your customer says "I take 5". What does he mean?

When quoting the exchange rate between the USD and AUDI which is conventionally the base currency?

What is Model Codes recommendation on the settlement of dirrerences by "points"?

The market is quoting: 3-month (90-day) NZD 2.55% 6-month (182-day) NZD 2.75% What is the 3x6 rate in NZD?

Under Basel III the Credit Value Adjustment will apply to:

A dealer has been asked by a broker to go to an exclusive club for the third time in a week. He should:

In order to be introduced in a controlled manner, which areas should be involved before a new product or business strategy is launched?

How would you compute the bid side of the forward/forward FX swap points?

A USD deposit traded in London between two German banks is cleared:

Which of the following risks are considered market risks?

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

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

Where the Committee for Professionalism of the ACI has been notified of a breach of the letter or spirit of the Model Code, it

What is the meaning of CCP within the Basel framework?

Which of the following is true about interest rate swaps (IRS):

A customer sells a 3-month Euro Swiss Franc (EUROSWISS) futures contract. Which of the following risks could he be trying to hedge?

ACI Dealing Certificate-Part A

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