ACI ACI Certifications 3I0-012 Questions & Answers

• Question 341:

  What is the name of a swap in which the counterparties sell currencies to each other with a concomitant agreement to reverse the exchange of currencies at a fixed date in the future at the same price, and where the interest rates for the two currencies are reflected in the two exchanges but paid separately?

  A. aFXswap

  B. an in/out swap

  C. a currency swap

  D. a quanto swap

  Correct Answer: C

• Question 342:

  What is a long strangle option strategy?

  A. A short call option + short put option with a higher strike price than the call option

  B. A long call option + long put option with a lower strike price than the call option

  C. A short call option + short put option with a lower strike price than the call option

  D. A long call option + short put option with higher strike price than the call option

  Correct Answer: B

• Question 343:

  If the yield curve is upward sloping, a bank would not profit from:

  A. borrowing short and lending long

  B. borrowing long and lending short

  C. paying a higher rate on deposits than the market

  D. increasing the banks leverage

  Correct Answer: B

• Question 344:

  Issues relating to the bank's liquidity management are commonly discussed in:

  A. the Asset Liability Management Committee (ALCO)

  B. the Financial Resources and Compensation Committee

  C. the Credit Committee

  D. the Federal Open Market Committee

  Correct Answer: A

• Question 345:

  Which of the following transactions would have the effect of shortening the average duration of liabilities in the banking book?

  A. selling holdings of 30-year German Government bonds

  B. replacing retail savings accounts with 3-month borrowings under repo

  C. selling futures contracts on 30-year German Government bonds

  D. placing a 20-year covered bond in the market

  Correct Answer: B

• Question 346:

  What is Funds Transfer Pricing in the ALM process?

  A. A maturity analysis of a bank's interest-bearing assets and interest-bearing liabilities.

  B. A method used to measure how much each source of funding is contributing to overall profitability.

  C. A calculation of the spread between the duration of the interest-bearing assets and the interestbearing liabilities.

  D. The evaluation and management of the gap between a bank's volume of loans and deposits.

  Correct Answer: B

• Question 347:

  Which of the following statements about requirements for dealing with limit violations is correct?

  A. Financial institutions have to establish procedures for handling limit breaches that are in accordance with their decision-making hierarchy.

  B. If a partial limit violation does not exceed the overall limit, no reaction is required.

  C. The definition of escalation levels is not required in order to react appropriately to different sorts and intensities of limit breaches.

  D. It is adequate and proper to define reactions only to standard cases of limit violations.

  Correct Answer: A

• Question 348:

  If you have created a `synthetic asset' by buying and selling a USD/CHF swap, what have you done?

  A. Created an exposure to the CHF

  B. Created an exposure to the USD

  C. Switched a CI-IF asset temporarily into USD without taking currency risk

  D. Switched a USD asset temporarily into CHF without taking currency risk

  Correct Answer: C

• Question 349:

  If I say that I have "bought and sold" EUR/USD in an FX swap, what have I done?

  A. Bought EUR and sold USD spot, and sold EUR and bought USD forward

  B. Bought USD and sold EUR spot, and sold USD and bought EUR forward

  C. Synthetically taken a USD loan in exchange for making a EUR loan with the same counterparty

  D. Sold EUR/USD spot and bought back EUR/USD forward

  Correct Answer: A

• Question 350:

  If EUR/USD is 1.3025-28 and the 6-month swap is 15.50/17, what is the 6-month outright price?

  A. 1.3042-1.30435

  B. 1.30405-1.3045

  C. 1.30095-1.3011

  D. 1.4575- 1.4728

  Correct Answer: B