ACI ACI-Financial Markets Association 3I0-010 Questions & Answers

• Question 31:

  Your dealer bought a 6x9 USD 4,000,000.00 FRA at 6.75%. Settlement is now due and 3 months (90 days) USD LIBOR is 5.50%. What amount do you pay or receive?

  A. receive USD 12,330.46

  B. pay USD 12,330.46

  C. pay USD 12,163.81

  D. receive USD 12,163.81

  Correct Answer: B

• Question 32:

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

  A. LIBOR

  B. LIMEAN

  C. LIBID

  D. EURIBOR

  Correct Answer: A

• Question 33:

  The fixing of a EUR FRA usually takes place:

  A. At the end of the FRA period

  B. When the deal is done

  C. Two business days before the start date of the FRA period

  D. On the third Monday of the contract month

  Correct Answer: C

• Question 34:

  Which of the following statements is correct?

  A. The settlement of a FRA is paid at maturity date.

  B. The settlement amount is paid at the trade date of a FRA.

  C. The cash settlement amount on a FRA is usually a discounted amount.

  D. The settlement amount on a FRA is not based on the LIBOR for the relevant period.

  Correct Answer: C

• Question 35:

  A FRA is:

  A. an instrument for managing interest rate risk

  B. an instrument for managing credit rate risk

  C. an instrument that never impacts P/L

  D. the forward leg of an FX swap

  Correct Answer: A

• Question 36:

  What is a straddle?

  A. a level of risk on derivatives

  B. a type of option

  C. a derivative benchmark

  D. a derivative strategy using options

  Correct Answer: D

• Question 37:

  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

  Correct Answer: B

• Question 38:

  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

  Correct Answer: C

• Question 39:

  Minimum reserves at the European Central Bank are:

  A. not remunerated

  B. remunerated at the marginal lending facility rate minus 2%

  C. remunerated at the rate of the deposit facility

  D. remunerated at the main refinancing rate

  Correct Answer: D

• Question 40:

  Calculation basis for EUR money market transaction is:

  A. 30/360

  B. ACT/365

  C. ACT/ACT

  D. ACT/360

  Correct Answer: D