ACI ACI Certifications 3I0-012 Questions & Answers

• Question 331:

  If you take an 18-month USD deposit, when is interest payable?

  A. Quarterly

  B. At maturity

  C. Semi-annually

  D. After one year and at maturity

  Correct Answer: D

• Question 332:

  Under Basel Securitization rules the highest potential risk weight is:

  A. 350%

  B. 750%

  C. 1250%

  D. 1500%

  Correct Answer: C

• Question 333:

  You are entering into a swap as a fixed rate receiver with Party A and into an offsetting position with party

  B. All other things being equal, which of the scenarios below will lead to the greatest increase in the sum of the Credit Value Adjustments for A and B?

  A. upward shift of the swap curve and rating downgrade of party A

  B. downward shift of the swap curve and rating downgrade of party A

  C. downward shift of the swap curve and rating downgrade of party B

  D. downward shift of the swap curve only

  Correct Answer: B

• Question 334:

  Under Basel rules, what is the meaning of RWA?

  A. Risk Weighted Assets

  B. Risk Weighted Average

  C. Recovery Weighted Assets

  D. Risk Weighted Adjustments

  Correct Answer: A

• Question 335:

  What does the term "mine" mean when given in response to an FX spot quotation?

  A. I buy the base currency at the bid rate.

  B. I buy the base currency at the offer rate.

  C. I buy the counter-currency at the offer rate.

  D. I sell you the base currency at the bid rate,

  Correct Answer: B

• Question 336:

  Assume the following scenario:

  Bank A bids for EUR 5,000,000.00 at 1.3592.

  Bank B offers EUR 10,000,000.00 at 1.3597.

  Broker XYZ quotes to the market EUR/USD 1.3592/97.

  Bank C takes the offer at 1.3597.

  What information is the broker obliged to reveal?

  A. the name of Bank A and Bank B

  B. the names of Bank B and Bank C

  C. the amount that was bid but not the name of Bank A

  D. the amount taken by Bank C as well as the amount that was bid

  Correct Answer: B

• Question 337:

  Which of the following correctly states the Model Code's recommendations regarding terms and documentation?

  A. Such documentation should be bi-laterally signed by the dealers of both principals intending to transact business.

  B. When using such agreements... the wording in the agreement must be changed to match the actual transaction details after trading.

  C. Such documentation should be signed, in many cases before any applicable market transactions are entered into.

  D. For instruments where standard terms do not exist, the Model Code recommends that no documentation should be used.

  Correct Answer: C

• Question 338:

  As to general risk management principles, the Model Code mentions that the organizationalstructure should ensure independent risk management and controls. Which one of the following is not among those controls?

  A. open and effective communication channels between all levels of staff and cross-functions should be maintained.

  B. regular internal audits should be carried out together with trading and risk management to ensure early identification of internal control weaknesses

  C. complete segregation of duties between the front, middle and back office activities

  D. a separate system for independent monitoring to ensure compliance with the risk management framework should be in place

  Correct Answer: B

• Question 339:

  What is the documentation in which the parties agree to the terms that will govern future transactions?

  A. standard settlement instructions

  B. netting agreement

  C. terms of engagement

  D. master agreement

  Correct Answer: D

• Question 340:

  What are de minimis claims?

  A. claims of less than USD 100.00

  B. claims of less than USD 1,000.00

  C. claims of less than EUR 100.00

  D. claims of less than EUR 1,000.00

  Correct Answer: B