ACI ACI Certifications 3I0-012 Questions & Answers

• Question 51:

  Which of the following would not constitute an event of market isruption under the Model Code?

  A. The imposition of capital controls.

  B. A major terrorist attack on a financial centre.

  C. The failure of SWIFT.

  D. Concerted cestal bank intervention.

  Correct Answer: D

• Question 52:

  You hear from several counterparties that a major market participant has taken major losses on long USD/ JPY positions. You know the reports are untrue, as you have in fact bought large amounts of USD/JPY from that very firm, which means that the impact of the reports on the market would be helpful to your position.

  A. As you have heard the reports from other parties, you are entitled to pass them on to market news services.

  B. As you have heard the reports from other parties, you are entitled to pass them on to other market participants.

  C. You should not pass any information you know to be false.

  D. You should contradict the reports.

  Correct Answer: C

• Question 53:

  Where dealing through an intermediary with an unidentified principal, the Model Code recommends:

  A. It is good practice for compliance, legal or credit functions to identity counterparties before the execution of a deal.

  B. Management should have in place a clearwritten policy and procedures governing such transactions.

  C. Management needs to be aware of the risks involved, particularly with respect to credit exposure and money laundering.

  D. All of the above.

  Correct Answer: D

• Question 54:

  You hear from a client of good standing that a major market participant has taken major losses on its proprietary trading book and is desperate for liquidity. You are not convinced that the story is true, but have a friend at another bank who you know has very large exposures to this firm and would be seriously damaged by a default. What advice does the Model Code give?

  A. Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should not be passed on in any circumstances.

  B. Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should be discussed only with great care.

  C. Unsubstantiated information which you suspect to be inaccurate and which could be damaging to a third party should be reported to the regulator in order to provide warning of possible systemic problems.

  D. You have a duty to warn counterparties but should make clear that the information is unsubstantiated.

  Correct Answer: B

• Question 55:

  Making interest rate swap transactions subject to agreement on documentation:

  A. Is recommended where the complications of the transaction warrant the practice.

  B. Is strictly forbidden.

  C. Is considered bad practice.

  D. Must have senior management approval.

  Correct Answer: C

• Question 56:

  Brokers should confirm all transactions:

  A. Initially by fax or other acceptable electronic means, then in writing.

  B. Only if the deal is between overseas counterparties and for value today.

  C. Only if the transaction is not for a marketable amount.

  D. To both counterparties immediately by fax or other acceptable electronic means.

  Correct Answer: D

• Question 57:

  You have received a gift from a good friend who also happens to be your USD/YEN broker. Under such circumstances, the Model Code recommends that you should:

  A. Always decline gifts.

  B. Give the gift to charity.

  C. Keepthe gift.

  D. Report the gift to management.

  Correct Answer: D

• Question 58:

  The extension of forward FX contracts at their historic rates is only allowed when:

  A. Prior management approval has been sought.

  B. They are executed within six months.

  C. They are extended for not more than one year.

  D. All of the above.

  Correct Answer: A

• Question 59:

  Bank participants have a duty to make it clear that their prices are firm or merely indicative:

  A. Only if they are dealing with brokers.

  B. Only if they are dealing in a fast moving market.

  C. Only if the amount is not marketable.

  D. At all times.

  Correct Answer: D

• Question 60:

  Click on the Exhibit Button to view the Formula Sheet, If the value date of forward USD/JPY transactions is declared a holiday in either New York or Tokyo, the correct value date will be:

  A. The value date of the centre which is open.

  B. The next business day of the centre which is closed.

  C. The next business day when both NewYork and Tokyo are open.

  D. None of the above.

  Correct Answer: C