Free 3I0-010 Exam Dumps PDF Preview

Question 1

Single choice

For which of the following transactions are proper and completed bilateral master agreements considered essential PRIOR to any dealing?

A
spot FX
B
repo
C
forward FX
D
FRAs

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Correct answerB

Question 2

Single choice

Which of the following institutions is not a cross-border clearing house?

A
Monte Tittoli Milano
B
Euro clear Brussels
C
Clear stream Banking Luxembourg
D
SWIFT

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Correct answerD

Question 3

Single choice

What is the main purpose of nostro reconciliations?

A
to compare the cash entries that have passed through the banks internal nostro accounts, with the actual cash movements at the banks agent account. Thus, expected cash movements are reconciled with actual cash movements.
B
to compare the securities entries that have passed through the banks internal nostro accounts, with the actual securities movements at the banks agent account
C
to compare expected securities movements with actual securities movements
D
to provide an overview of all the transactions listed by counterparty

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Correct answerA

Question 4

Single choice

In the unexpected event that a public holiday is declared on the date a particular contract matures, what is the normal market practice?

A
if that day is NOT the final trading day of the month, all contracts maturing on that day are extended to the next business day
B
if that day is NOT the final trading day of the month, all contracts maturing on that day are shortened to the preceding business day
C
all new maturity dates have to be agreed upon with the counterparties involved
D
decisions about the maturity dates of trading contracts are made by ACI's Committee for Professionalism on a case-by-case basis and must be adhered to

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Correct answerA

Question 5

Single choice

Your FX swap dealer bought and sold 1 month EUR/USD 25,000,000.00; rates were set to 1.2500 against 1.2520.

What payment is your bank expecting in a month from now?

A
USD 31,300,000.00
B
USD 31,250,000.00
C
EUR 25,000,000.00
D
USD 19,968,051.12

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Correct answerA

Question 6

Single choice

A message received and accepted by SWIFT will be acknowledged with:

A
NAK
B
ACK
C
PAC
D
BAC

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Correct answerB

Question 7

Single choice

Under normal circumstances, which of the following is a non-negotiable instrument?

A
a Medium Term Note
B
a Bankers Acceptance
C
a Money Market Deposit
D
a Treasury Bill

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Correct answerC

Question 8

Single choice

Major amendments to a prospectus can be made:

A
at the discretion of the issuer and after the launch
B
only with the consent of the note holders
C
always in the case of default payment
D
only by the custodian with the consent of the issuer

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Correct answerB

Question 9

Single choice

If the 90-day EUR rate is 3.10% and the 180-day is 3.50%, what is the 120-day rate using straight-line interpolation?

A
3.20%
B
3.21%
C
3.23%
D
3.30%

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Correct answerC

Question 10

Single choice

The difference between the bid and the offer rate of a money market quotation is called:

A
the margin
B
the spread
C
the variation
D
the premium

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Correct answerB

Question 11

Single choice

Which of the following best describes the main benefit of the RTGS payment system?

A
final settlement of interbank funds transfers on a continuous, trade by trade basis throughout the day
B
lower costs through fewer payments passing through nostro accounts
C
lower costs through less labour intensive methods
D
reduced market risk due to smaller values of open positions

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Correct answerA

Question 12

Single choice

In what order would the currencies of the major currency pairs generally be quoted in forex?

A
EUR/USD, USD/JPY, USD/GBP, USD/CHF, USD/CAD, USD/AUD
B
EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD
C
EUR/USD, USD/JPY, GBP/USD, USD/CHF, CAD/USD, AUD/USD
D
EUR/USD, USD/JPY, GBP/USD, USD/CHF, CAD/USD, USD/AUD

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Correct answerB

Question 13

Single choice

Which of the following are primary markets?

A
auction markets conducted by the U.S. Treasury for U.S. Treasury bills
B
the repo market
C
the foreign exchange market
D
the over-the-counter market for U.S. Government Bonds

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Correct answerA

Question 14

Single choice

S.I. stands for:

A
Secure Software Integration
B
Standard Settlement Instructions
C
Single Shared Information
D
SWIFT Settlement Instruction

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Correct answerB

Question 15

Single choice

When an over-the-counter broker executes an order for your bank, what information is required on the confirmation you are sent?

A
the price of the security
B
the price of the security; the role played by the broker
C
the price of the security; the role played by the broker; and the commission, if any, that was charged
D
The price of the security; the role played by the broker; the commission, if any, that was charged and
the security that was bought or sold

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Correct answerD

Question 16

Single choice

Which SWIFT message type family is used for securities transactions?

A
MT 3XX
B
MT 2XX
C
MT 5XX
D
MT 1XX

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Correct answerC

Question 17

Single choice

For the third time in a month, a back office clerk has been questioned by one of his spot FX dealers about back office payment authorization and confirmation procedures.

What should he/she do?

A
He/she should report this to his/her supervisor
B
He/she should respond to the questions
C
He/she should avoid the dealer
D
He/she should refuse to answer the questions

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Correct answerA

Question 18

Single choice

Which SWIFT message type is a nostro cash reconciliation software package based on?

A
SWIFT message type 300
B
SWIFT message type 292
C
SWIFT message type 571 (i.e. a statement of holdings)
D
SWIFT message types 940 and 950 (i.e. a statement of account)

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Correct answerD

Question 19

Single choice

If a 90-day interest rate is 5 1/4% and a 180-day interest rate is 6.30%.

What is the 126-day rate using straight-line interpolation?

A
5.66%
B
5.67%
C
5.68%
D
5.69%

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Correct answerB

Question 20

Single choice

Why should the maturity profile of unreconciled items be frequently reviewed?

A
It allows the compliance officer to see how often the reconciliation staff has claimed for an outstanding item
B
It allows management to see what items are pending by value and counterparty, but also how long items have been outstanding and whether there is an improvement in the pace of reconciliations.
C
It allows reconciliation staff to check the bilateral limits with counterparties and to adjust these limits as necessary
D
because the most recent figures have to be published in the balance report

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Correct answerB

Question 21

Single choice

The depositary of your securities:

A
is responsible only for the settlement of those securities
B
is responsible only for safeguarding the securities that you have on your account
C
is responsible for safeguarding both the securities that you have on your account and their settlement
D
is never responsible for safeguarding securities

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Correct answerC

Question 22

Single choice

What are the major objectives of the Model Code?

A
to promote the Basel II agreements
B
to promote international cooperation to combat money laundering
C
to promote domestic financial regulations
D
to promote a high level of ethical and professional conduct in order to create an efficient market

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Correct answerD

Question 23

Single choice

What is volatility?

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

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Correct answerB

Question 24

Single choice

You spot a rate discrepancy between you and your counterparty on a AUD/USD deal. The deal was traded direct. You refer the discrepancy to the dealer and he tells you to change the rate.

What should you do?

A
amend the rate yourself
B
ask the settlements clerk to amend the rate for you
C
ask the dealer to manually amend the rate on the ticket and then pass it to the settlements clerk to amend
D
make no amendment

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Correct answerC

Question 25

Single choice

What is the "spread" in an interest rate swap (IRS)?

A
the interest rate differential between the fixed and floating leg of the swap
B
the brokerage fee for an interest rate swap transaction
C
the payment made when a swap is terminated
D
the difference between the swap rate and the benchmark government yield

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Correct answerD

Question 26

Single choice

If a GBP/CHF trade is made on the spot foreign exchange market on Tuesday, when will the two currencies be settled if tomorrow (Wednesday) is a bank holiday in the U.K.
?

A
both currencies will be settled value date Friday
B
GBP will be settled value Friday, CHF value Thursday
C
both currencies will be settled value Thursday
D
GBP will be settled value today, CHF will be settled value Friday

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Correct answerA

Question 27

Single choice

FX Swaps can be used to:

A
swap a fixed leg into a variable leg
B
buy or sell the currency of your choice
C
arbitrage between foreign exchange and interest rates
D
arbitrage between deposits and forward points

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Correct answerD

Question 28

Single choice

Which department is responsible for originating deals?

A
the front office
B
the back office
C
the middle office
D
the compliance department

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Correct answerA

Question 29

Single choice

Which of the following is a fundamental element or module in the "securities dealing and processing" part of a treasury system?

A
the financial reporting standard
B
brokerage accounting
C
the custodian account reconciliation function
D
the country limit overview

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Correct answerC

Question 30

Single choice

Depending on the interest rates of the two currencies involved, the forward foreign exchange rate:

A
can only be higher or equal to the current spot rate
B
can only be lower or equal to the current spot rate
C
can never be equal to the current spot rate
D
can either be higher, lower or equal to the current spot rate

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Correct answerD

Question 31

Single choice

Which of the following factors must be considered when making interbank EUR payments in RTGS systems between 17:00 CET and 18:00 CET with same day value?

A
no special requirements need to be considered
B
the receiver has to approve the transfer
C
interest has to be paid to the receiver
D
the receiver is required to accept the payment amount

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Correct answerA

Question 32

Single choice

Confirmation is a function that can be performed by:

A
any dealer as long as he/she is not a party to the trade
B
back-office staff
C
dealing room staff who is not currently dealing
D
any staff outside the dealing room

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Correct answerB

Question 33

Single choice

Internationally, USD FRAs are settled with reference to which market rate?

A
LIBOR
B
LIMEAN
C
LIBID
D
EURIBOR

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Correct answerA

Question 34

Single choice

The maximum term for which a London Certificate of Deposit may be issued is:

A
1 year
B
3 years
C
5 years
D
10 years

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Correct answerC

Question 35

Single choice

Your dealer has sold a 3x6 USD 10,000,000.00 FRA at 5.55%. On settlement day the 3-month (90-day) fixing is 5.45%.

What would you do?

A
pay USD 2,466.40
B
receive USD 2,465.79
C
pay USD 2,465.79
D
receive USD 2,466.40

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Correct answerD

Question 36

Single choice

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

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Correct answerA

Question 37

Single choice

Which clearing system allows a transfer to be settled with immediate finality?

A
EAF
B
EBA
C
RTGS
D
SWIFT

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Correct answerC

Question 38

Single choice

Which risk factors fall under counterparty risk?

A
currency risk, interest rate risk and swap risk
B
settlement risk, delivery risk and replacement cost
C
operational risk
D
settlement risk and swap risk

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Correct answerB

Question 39

Single choice

If an overnight EUR/USD FX swap is traded on Tuesday, 19 June, and there are no currency holidays during the week of June 18 22, what would be the value dates of the two swap legs?

A
18 June against 19 June
B
19 June against 20 June
C
20 June against 21 June
D
21 June against 22 June

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Correct answerB

Question 40

Single choice

What are the factors determining if a FX transaction can be settled through the CLS Bank?

A
currency pair, price
B
currency pair, counterparty, time
C
currency pair, price, counterparty
D
counterparty, price

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Correct answerB

Question 41

Single choice

Which of the following is a description of a long OTC foreign currency option position?

A
the obligation to buy one currency and to sell another currency at a predetermined price
B
an option that uses IMM maturities
C
an option dealt directly between two counterparties
D
an interest rate protection instrument dealt on an exchange trading floor

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Correct answerC

Question 42

Single choice

In the US commercial paper market, commercial paper is limited to

A
a 270-day tenor
B
a 360-day tenor
C
a 365-day tenor
D
a 366-day tenor

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Correct answerA

Question 43

Single choice

An interest rate CAP can be defined as:

A
a series of American call options on FRAs
B
a series of European call options on FRAs
C
a series of American put options on FRAs
D
a series of European put options on FRAs

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Correct answerB

Question 44

Single choice

Which of the following are products used in bank liquidity management?

A
money market taking and placing, sale and repurchase agreements (repos)
B
currency options and currency futures
C
spot FX transactions
D
caps, floors, collars, and interest rate futures

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Correct answerA

Question 45

Single choice

Two days ago, your dealer sold USD 500,000.00 against JPY. JPY 54,945,000 were credited to your JPY nostro account.
The deal was made at what rate?

A
at 109.89
B
at 0.0091
C
at 10.9890
D
at 1.0989

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Correct answerA

Question 46

Single choice

Your trader has bought EUR 5,000,000.00 against USD at 1.0891.

How much would you expect to pay for settlement?

A
USD 4,590,946.65
B
USD 5,545,500.00
C
USD 4,582,951.42
D
USD 5,445,500.00

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Correct answerD

Question 47

Single choice

When completing a nostro reconciliation, what does an unresolved ledger credit signify?

A
the duplicate receipt of funds from a counterparty
B
the non-payment of funds to a counterparty
C
the duplicate payment of funds to a counterparty
D
the non-receipt of funds from a counterparty

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Correct answerB

Question 48

Single choice

According to ISDA definitions, if an USD IRS payment is due value Saturday, 31 May and the documentation states that the "modified business day convention" will be used, what value date should be applied to the payment?

A
Saturday, 31 May
B
Tuesday, 3 June
C
Monday, 2 June
D
Friday, 30 May

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Correct answerD

Question 49

Single choice

What is the first task of the cash positions keeper every day?

A
makes sure the opening position for the current day is the agreed and reconciled position from the previous day
B
makes sure the previous days pending position is the opening position for the current day
C
He/she checks to see which dealer is in charge of which currency for that day
D
He/she checks to see which countries have bank holidays that day

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Correct answerA

Question 50

Single choice

On 15 April 2010 you buy a bond whose coupon falls on 15 January 2010. The interest basis is 30/360.
Using bond settlement T+1, how many days do you apply for the interest calculation?

A
89 days
B
90 days
C
91 days
D
92 days

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Correct answerC

Question 51

Single choice

The trade life cycle of a treasury deal starts with input and ends with:

A
accounting
B
adjustment of bilateral limits
C
netting
D
nostro reconciliation

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Correct answerD

Question 52

Single choice

A month ago, a customer placed EUR 100,000.00 at 2% on a time deposit for 90 days. Today, 30 days later, he requests an anticipated close of his deposit. 2 and 3 month interbank rates are 2 1/8% bid and 2 1/4% offered.

What do you do?

A
You agree and pay back to the customer the capital plus 2% interest calculated on 30 days
B
You agree and pay back to the customer the capital plus 2% interest on 30 days less your refinancing costs of 1/8% calculated on 30 days
C
You agree and pay back to the customer the capital plus 2% interest on 30 days less your refinancing costs of 1/8% calculated on 60 days
D
You agree and pay back to the customer the capital plus 2% interest on 90 days minus the actualization of this amount at 2 1/4% calculated over 60 days

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Correct answerD