ACI ACI Certifications 3I0-012 Questions & Answers

• Question 161:

  To curb attempted fraud, banks should:

  A. Require greater vigilance by the management and staff.

  B. Take particular care when the beneficiary is a third party to the deal.

  C. Ensure that details of all telephone deals which do not include pre-agreed standard settlement instructions are confirmed by telex or similar means without delay.

  D. All of the above.

  Correct Answer: D

• Question 162:

  Confirmations must be sent out

  A. Immediately after the deal is done.

  B. As quickly as possible after the deal is done.

  C. By electronic media only, e.g. fax, telex.

  D. Not later than the value date of the first leg of the transaction.

  Correct Answer: B

• Question 163:

  Where the matter of dealing for personal account is concerned, the Model Code recommends that

  A. Subject to local legal requirements, this matter is one for bank management to decide.

  B. Bank management should encourage such activities because it allows banks to monitor the gambling habits of their staff.

  C. Where this is allowed, bank management should have a clearly defined policy and written procedures.

  D. Bank management should allow staff to deal for their personal account on a case to case basis.

  Correct Answer: C

• Question 164:

  What is a Vostro account?

  A. Your account at another bank

  B. A foreign bank's account in your bank in your domestic currency

  C. An account in your bank used for internal transactions

  D. A customer's account at your bank

  Correct Answer: B

• Question 165:

  For which of the following reasons is the extension of forward contracts at non-current rates is discouraged:

  i. These could be used to conceal profit or losses.

  ii. These could be used to perpetrate fraud.

  iii. These could result in an unauthorised extension of credit.

  iv.

  These could result in confusing settlement instructions.

  A.

  (i), (ii), (iii), and (iv).

  B.

  (i), (ii) and (iii).

  C.

  (i) and (iii).

  D.

  none of the above.

  Correct Answer: B

• Question 166:

  Fraud is typically classified as:

  A. Credit risk

  B. Market risk

  C. Legal risk

  D. Operational risk

  Correct Answer: D

• Question 167:

  What is the effect of netting?

  A. To reduce the number and size of payments and transfers

  B. To reduce exposure to credit risk

  C. To reduce the size of the balance sheet

  D. All of the above

  Correct Answer: D

• Question 168:

  A dealer does the following deals in EUR/USD:

  buys EUR 1 m at 11020 sells EUR 3 m at 1.1022 buys EUR 2 m at 1.1002 buys EUR 1.5 m at 1.1012

  What position does the dealer now have?

  A. Long EUR 1.5 m at 1.0984

  B. Short EUP 1.5 m at 1.1036

  C. Long EUR 1.5 m at 1.1012

  D. Short EUR 3.0 mat 1.1025

  Correct Answer: A

• Question 169:

  What is the probability of an at-the-money option being exercised?

  A. Less than 50% probability

  B. 50% probability

  C. More than 50% probability

  D. Zero probability

  Correct Answer: B

• Question 170:

  You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity . 6-month LIBOR for the next payment date is fixed today at 4.95%. You expect 6-month LIBOR in 6 months to fix at 5.25%, in 12 months at 5.35% and in 18 months at 5.40%. What do you expect the net settlement amounts to be over the next 2 years? Assume 30-day months.

  A. pay 250, receive 1,250, receive 1,750, receive 2,000

  B. receive 250, pay 1,250, pay 1,750, pay 2,000

  C. pay 2,500, receive 12,500, receive 17,500, receive 20,000

  D. receive 2,500, pay 12,500, pay 17,500, pay 20,000

  Correct Answer: C