Click on the Detail Button to view the Formula Sheet. When dealing with a fund manager, who will allocate shares in a transaction to his unknown clients after the transaction has been executed with you, you should:
A. Agree in writing with the fund manager that the allocation will be confirmed as soon as practicable after the transaction is executed.
B. Insist on the allocation being made and confirmed before the transaction is executed.
C. Agree in writing with the fund manager that he will guarantee the transaction until the allocation is confirmed.
D. Any of the above.
Click on the Detail Button to view the Formula Sheet. What is the risk of dealing through an agent with an unknown principal?
A. You may not be able to ensure that your firm can avoid suspicion of trading on non-public information or other allegations of bad or illegal trading practice.
B. You may not be able to net your exposure in an insolvency.
C. You may not be able to net your exposure for capital adequacy purposes.
D. All of the above.
Click on the Detail Button to view the Formula Sheet. A 3-month (91-day) deposit of EUR25 million is made at 3.25%. At maturity, it is rolled over three times at 3.55% for 90 days, 4.15% for 91 days and 4.19% for 89 days. At the end of 12 months, how much is repaid (principal plus interest)?
A. EUR 25,962,011.01
B. EUR 25,959,714.91
C. EUR 25,948,878.47
D. EUR 25,948,648.82
Click on the Detail Button to view the Formula Sheet. You and a dealer at another bank have an informal
bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the
other dealer refuses to quote to you.
The Model Code states that:
A. The other dealer should act with honour, honesty and integrity.
B. It is a purely matter for your two institutions.
C. Such arrangements are not in any way enforceable or binding.
D. All of the above.
Click on the Detail Button to view the Formula Sheet. A broker offers a dealer an incentive in the form of a reduction to the agreed schedule of brokerage between the firms.
A. This is a normal volume discount.
B. The offer requires approval in writing by both senior managements.
C. The offer requires agreement in writing between the broker and the dealer.
D. This is illegal.
Click on the Detail Button to view the Formula Sheet. Where internet trading facilities are established by a bank for a client, the conditions and controls should be stated in a rulebook produced by:
A. The bank.
B. The local bankers association.
C. The local regulator.
D. Negotiation between the bank and client.
Click on the Detail Button to view the Formula Sheet. The Model Code rules that deals at non-current rates:
A. Are forbidden.
B. Require prior regulatory approval.
C. Require the prior express permission of the senior management of both counterparties.
D. Should be marked to market daily.
Click on the Detail Button to view the Formula Sheet. The Chairman and members of the ACIs Committee for Professionalism are ready to assist in resolving disputes through the ACIs Expert Determination Service in situations where:
A. The amount of the deal exceeds EUR 5 million.
B. The local regulator or central bank declines to intervene.
C. Litigation has already commenced.
D. At the request of one of the counterparties.
Click on the Detail Button to view the Formula Sheet. Where the Committee for Professionalism of the ACI has been notified of a breach of the letter or spirit of the Model Code, it
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.
Click on the Detail Button to view the Formula Sheet. Where repos or securities lending transactions are entered into, the Model Code recommends:
A. Documentation should be in place beforehand.
B. Management should approve all transactions.
C. Copies of the underlying documentation should be lodged with regulators.
D. All of the above.
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