ACI ACI Certifications 3I0-012 Questions & Answers

• Question 581:

  A US security yields 7% on an annually-compounded bond basis. What is the equivalent annually-compounded money market yield?

  A. 7.09%

  B. 7.03%

  C. 6.90%

  D. 6.95%

  Correct Answer: C

• Question 582:

  Which of the following correctly states the Model Code's recommendations regarding electronic trading and broking?

  A. Liquidity providers should be cognizant of reputational risks when supplying liquidity for onward third party consumption.

  B. Market participants must not seek information as to the legal status of a potential counterparty before allocating credit or trading status.

  C. Transactions should be handled in accordance with the regulator's dealing rule book.

  D. Access to systems internally and at the client interface must be strictly controlled by the dealers.

  Correct Answer: A

• Question 583:

  What steps will the CFP of the ACI probably not undertake after having been formally notified by one of the parties of a breach of the letter or spirit of the Model Code?

  A. consult the local ACI national association

  B. bring the matter to the appropriate court of justice

  C. examine the complaint

  D. bring the matter to the attention of the appropriate regulatory body

  Correct Answer: B

• Question 584:

  Experience has shown that recourse to taped telephone conversations proves invaluable to the speedy resolution of disputes. Therefore, the Model Code recommends:

  A. that all telephone conversations (internal and external) be taped without informing counterparties

  B. that only conversations undertaken by dealers and brokers should be recorded

  C. that all conversations undertaken by dealers and brokers should be recorded, together with back office telephone lines used by those responsible for confirming deals or passing payments to other institutions

  D. that only telephone conversations between dealers and brokers be recorded

  Correct Answer: D

• Question 585:

  For which of the following might an MT370 be used?

  A. To confirm an FX transaction

  B. To advise the netting position of a currency in NDFS

  C. To advise changes in SSIs

  D. To confirm a MM transaction

  Correct Answer: B

• Question 586:

  You quote a price to a broker. It is hit by another bank, but you are not informed until some time afterward that the deal has been done. Who is to blame?

  A. You are, as it is your responsibility to check periodically that the price has not been dealt upon.

  B. The broker is, as he must immediately tell you that your price has been dealt upon.

  C. The other bank is, since it did not immediately seek confirmation.

  D. All the parties, particularly you and the other bank.

  Correct Answer: B

• Question 587:

  Whose compliance rules, regulations and best practices should be followed in FX electronic trading?

  A. solely those of the electronic trading platforms vendors

  B. exclusively ACI's Model Code Best Practices

  C. ACI's Model Code Best Practices and ICMA's Market Practice and Regulatory Policy

  D. the electronic trading platforms vendors' and the ACIs Model Code Best Practices guidelines

  Correct Answer: B

• Question 588:

  Where sale and repurchase agreements or stock borrowing or lending transactions are entered into:

  A. screen services, brokers and other third party providers can all be useful sources of data

  B. For periods less than one month, the maturity date will be the first date that is a business day that is within one, seven, fourteen days from the value date, but when near the month end must never be a date in the next calendar month

  C. Inter-dealer brokers or the automated trading system need not be notified when participants attempt to utilize odd settlement dates

  D. It is not recommended that legal opinion should be obtained on the enforceability of the contract

  Correct Answer: A

• Question 589:

  What happens if an instruction remains unmatched and/or unsettled through CLS Bank?

  A. If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis.

  B. If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis.

  C. If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis.

  D. If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades.

  Correct Answer: C

• Question 590:

  What recommendation does the Model Code make to banks accepting a stop-loss order?

  A. The Model Code emphasizes the importance of clear, concise documentation and on-going lines of communication.

  B. Bank management must guarantee a fixed price execution to the counterparty.

  C. The Model Code recommends that only experienced dealers should be allowed to take such orders.

  D. Bank staff must secure the approval of the counterparty's management to accept such orders.

  Correct Answer: A