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
The calculation method of the foreign exchange rates for value today or for value tomorrow outrights:
A. is based on the interest rate differential between the two currencies
B. is based on the same calculation method as the forward rate agreements (FRA)
C. is based on linear interpolation
D. is based on the calculation of compound interest rates
What are the main advantages of settling an FX transaction through the CLS Bank?
A. CLS eliminates foreign exchange risk and thus increases bank profits on FX deals
B. CLS minimizes the settlement risk
C. CLS reduces operational banking costs
D. CLS eliminates the settlement risk but reduces operational efficiency
Which of the following statements apply to an FX swap?
A. It consists of two separate transactions, dealt with two different counterparties.
B. It replaces a pair of foreign exchange transactions.
C. It fully eliminates counterparty risk.
D. It reduces credit risk with the counterparty, as compared to money market deals.
If a dealer buys 1 million EUR/USD at 1.1122, 2 million EUR/USD at 1.1132, 3 million EUR/USD at 1.1175 and sells 1 million EUR/USD at 1.1185, what position is he left with?
A. Long 5 million EUR/USD at 1.1156
B. Long 5 million EUR/USD at 1.1145
C. Short 5 million EUR/USD at 1.1156
D. Short 5 million EUR/USD at 1.1145
The term "tom next" is used to describe a swap for which period?
A. tomorrow against spot
B. today against tomorrow
C. today against spot
D. tomorrow against the day after spot
Your dealers have made the following deals in spot USD/JPY: Sold USD 5,000,000.00 at 111.60 Bought USD 3,500,000.00 at 111.20 Bought USD 2,000,000.00 at 111.50 Sold USD 2,000,000.00 at 111.55
What is your position?
A. Short USD 1,500,000.00 at 112.60
B. Short USD 3,500,000.00 at 111.75
C. Long USD 1,500,000.00 at 111.10
D. Short USD 1,500,000.00 at 111.55
A dealer makes the following deals in EUR/USD: Sells EUR 1,500,000.00 at 1.1160 Buys EUR 3,250,000.00 at 1.1142 Sells USD 2,229,600,00 at 1.1148 Buys USD 1,450,410.00 at 1.1157 What is the dealers position as a result of these trades?
A. Short EUR 2,450,000.00 m at 1.1123
B. Long EUR 2,450,000.00 at 1.1128
C. Long EUR 2,000,000.00 at 1.1132
D. Long EUR 2,450,000.00 at 1.1125
Your dealer has sold EUR 5,000,000.00 against USD at 1.0945. How much would you expect to receive in settlement?
A. USD 5,472,500.00
B. USD 3,618,523.32
C. USD 5,453,650.00
D. USD 3,619,487.12
The CLS-Bank (Continuous Linked Settlement) is one of the ways through which FX transactions can be settled. Why was this bank founded?
A. to simplify domestic payments
B. to handle interbank liquidity more efficiently
C. to accelerate cross-border payments
D. to minimize settlement risks
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