ACI ACI Certifications 3I0-012 Questions & Answers

• Question 211:

  Which of the following are quoted in terms of a discount rate?

  A. USTreasury bill

  B. CD

  C. Interbank deposit

  D. ECP

  Correct Answer: A

• Question 212:

  What are 1MM dates?

  A. the tenth of the following months: March, June, September and December

  B. the third Wednesday of January, April, July and October

  C. the Monday before the third Wednesday of March, June, September and December

  D. the third Wednesday of March, June, September and December

  Correct Answer: D

• Question 213:

  What recommendation does the Model Code make in cases of market disruption?

  A. Market participants should strictly adhere to the rules issued by local regulators, supervisors or central banks in order to maintain efficiency and avoid disputes.

  B. Even if local provisions are in place, market participants should only adhere to the ACI best practices of the Model Code in order to maintain efficiency and avoid disputes.

  C. Participants must at all times adhere to the rules issued by local regulators, supervisors or central banks even if these rules or procedures conflict with any provision of an existing written agreement.

  D. Parties may unilaterally decide whether they wish to adhere to the terms of the agreement or to amend the terms of the transaction to follow the relevant procedure.

  Correct Answer: A

• Question 214:

  In spite of having agreed to a deal, dealers are not bound to its terms if it is "subject to documentation". What position does the Model Code take with regard to this practice?

  A. The practice of making a transaction subject to documentation is not regarded as good practice.

  B. It urges dealers to be bear in mind that this is a common practice for capital market deals.

  C. The Model Code does not comment on the matter.

  D. It recommends that national ACI Associations deal with this issue according to their local customs.

  Correct Answer: A

• Question 215:

  If there is a need for assistance to help resolve a dispute over differences between a broker and a bank, the Model Code suggests turning to:

  A. the monetary authority in the country where the broker is located

  B. the banking association in the country where the bank is located

  C. the Committee for Professionalism of the ACI

  D. the local foreign exchange market committee

  Correct Answer: C

• Question 216:

  What does the Model Code recommend regarding the practice of "name switching/substitution"?

  A. Dealers may seek a compensation payment in favor of the bank or an adjustment to brokerage bills from the broker for switching names.

  B. If requested by a broker to clear a transaction through name switching, a dealer must ensure that such activities have the prior approval of senior management.

  C. The practice of name switching/substitution is neither acceptable nor desirable.

  D. Name switching/substitution transactions should be executed as promptly as possible not considering credit limits and policy guidelines.

  Correct Answer: B

• Question 217:

  Dealers are allowed to trade for their own account only if:

  A. they have good track records in dealing both for their institution and for themselves

  B. there have been no previous conflicts of interest in the dealing room

  C. there is a clearly defined and written policy about the matter

  D. the dealers see no conflict of interest in such dealing

  Correct Answer: C

• Question 218:

  When an employee executes a personal trade in advance of a client's or institution's order to benefit from the anticipated movement in the market price following the execution of a large trade, it is called:

  A. front running

  B. ex ante trading

  C. insider dealing

  D. forward-facing

  Correct Answer: A

• Question 219:

  When initially negotiating an interest rate swap, a principal indicated his intention to assign it to a third party. In executing such a transfer:

  A. The principal is entitled to provide the name of the original counterparty to the transferee.

  B. The principal is entitled to provide the name of the transferee to the original counterparty.

  C. The principal should obtain the consent of the transferee before releasing its name.

  D. The principal should obtain the consent of the original counterparty before releasing its name to the transferee.

  Correct Answer: C

• Question 220:

  A payer's 3-month USD LIBOR swap with a remaining term of five years must be reported as:

  A. a five-year liability and a three-month asset

  B. a five-year asset and a three-month liability

  C. a five-year asset only

  D. a three-month liability only

  Correct Answer: A