ACI ACI Certifications 3I0-010 Questions & Answers

• Question 121:

  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

  Correct Answer: B

• Question 122:

  The market standard legal agreement for Interest Rate Swaps is:

  A. ISDA

  B. FRABBA

  C. SIFMA/ICMA

  D. ICMA

  Correct Answer: A

• Question 123:

  The risk that an institution will experience a loss on a trade or a position due to an adverse exchange/ interest rate movement is best described as:

  A. operational risk

  B. market risk

  C. systemic risk

  D. credit risk

  Correct Answer: B

• Question 124:

  Which combination of risks: market risk, settlement risk, basis risk, counterparty risk, is associated with a forward FX deal?

  A. market risk and settlement risk

  B. market risk, settlement risk and basis risk

  C. market risk, settlement risk and counterparty risk

  D. settlement risk and counterparty risk

  Correct Answer: C

• Question 125:

  Experience has shown that recourse to taped telephone conversations proves invaluable to the speedy resolution of disputes. Therefore, the Model Code recommends:

  A. that all telephone conversations be taped without informing any of the counterparties

  B. that all telephone conversations be taped subject to the consent of the counterparties

  C. that all telephone conversations between dealers and brokers be recorded

  D. that only telephone conversations between FX dealers be recorded

  Correct Answer: C

• Question 126:

  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

  Correct Answer: D

• Question 127:

  What does FSA stand for?

  A. Fiscal Standards Authority

  B. Financial Supervisory Association

  C. Financial Services Authority

  D. Financial Securities Association

  Correct Answer: C

• Question 128:

  Who produces the London Code of Conduct?

  A. SFA

  B. the Bank of England

  C. ACI

  D. FSA

  Correct Answer: D

• Question 129:

  Herstatt Risk is also known as:

  A. settlement risk

  B. translation risk

  C. replacement risk

  D. operational risk

  Correct Answer: A

• Question 130:

  In the absence of his normal dealer contact, a counterparty calls the back office and asks the clerk for his opinion about how long his money should be placed on deposit. What action should the back office clerk take?

  A. He should give his opinion.

  B. He should give his opinion and tell the counterparty that he is not qualified to do so.

  C. He should tell the counterparty that he is not qualified to give an opinion and refer the counterparty to another dealer.

  D. He should give his opinion and refer the counterparty to another dealer.

  Correct Answer: C