ACI ACI Certifications 3I0-012 Questions & Answers

• Question 281:

  What is the purpose of the Liquidity Coverage Ratio?

  A. to mitigate market replacement risk across markets

  B. to eliminate funding mismatches by establishing a minimum acceptable amount of stable funding

  C. to ensure that banks have enough high-quality liquid assets to survive a 30-day period of acute market stress

  D. to minimize duration risk on a bank's assets over a one-year horizon

  Correct Answer: C

• Question 282:

  Which of the following is a measure of a bank's gross exposure to foreign exchange rate risk?

  A. The maturity mismatch among assets and liabilities denominated in the home and reporting currencies.

  B. The gap between variable and fixed rate assets and liabilities across all currencies.

  C. The sum of all assets in one currency minus the sum of all liabilities in that same currency.

  D. The sum of all off-balance sheet assets in one foreign currency minus the on-balance sheet equity in another currency.

  Correct Answer: C

• Question 283:

  When constructing a gap report, how would a EUR 25,000,000.00 long position in 6x12 FRA be categorized?

  A. as a EUR 25,000,000.00 6-month liability and a EUR 25,000,000.00 12-month asset

  B. as a EUR 25,000,000.00 12-month liability and a EUR 25,000,000.00 6-month asset

  C. as a EUR 12,500,000.00 6-month liability and a EUR 12,500,000.00 12-month asset

  D. as a EUR 12,500,000.00 6-month asset and a EUR 12,500,000.00 12-month liability

  Correct Answer: B

• Question 284:

  What would happen to a bank's net interest income if it ran a zero gap in an environment of decreasing interest rates?

  A. Net interest income would increase slightly.

  B. Net interest income would increase considerably.

  C. Net interest income would decrease.

  D. Net interest income would hardly change at all.

  Correct Answer: D

• Question 285:

  What is a hedge?

  A. A means by which to reduce a risk

  B. An equal and opposite risk

  C. A riskless transaction

  D. A means of cancelling a deal

  Correct Answer: A

• Question 286:

  When is your settlement risk greatest on a spot FX deal?

  A. Today

  B. Tomorrow

  C. After you make an irrevocable payment

  D. On the spot value date

  Correct Answer: C

• Question 287:

  Which of the following is a characteristic of all liquid assets under Basel III?

  A. uncertainty of valuation

  B. high correlation with risky assets

  C. listed on a developed and recognized exchange

  D. readily marketable

  Correct Answer: D

• Question 288:

  Your broker quotes you EUR/USD at 1.3425-28. You respond by saying "yours". Which one of the following statements is true?

  A. You are committed to sell a marketable EUR amount unless the quote was for a specific amount.

  B. You are committed to sell to the counterparty his full EUR amount subject to credit limits on the counterparty.

  C. You are committed to sell EUR up to the amount permitted by your credit limits on the counterparty.

  D. You are committed to sell a marketable USD amount unless the quote was for a specific amount.

  Correct Answer: A

• Question 289:

  Which SWIFT message should be used to advise the netting position of a currency resulting from FX, NDF, options and other trades?

  A. MTn99

  B. MT300

  C. MT370

  D. MT670/671

  Correct Answer: C

• Question 290:

  What does the Model Code advise regarding the taping of telephone conversations?

  A. The tapes and other records should be kept until the transaction has been settled B. Firms should ensure that they comply with local privacy laws

  B. Management should ensure that the installation and control of recording equipment complies with local legislation, including laws on data protection, privacy and human rights as well as the manufacturers minimum requirements

  C. All front office personnel should have access to these tapes and records

  Correct Answer: B