ACI 3I0-010 Online Practice Questions and Exam Preparation

ACI 3I0-010 Online Questions & Answers

• Question 321:

  Illiquid describes an instrument which:

  A. does not trade in an active market
  B. does not trade on any exchange
  C. cannot be easily hedged
  D. is an over-the-counter (OTC) product
  A. does not trade in an active market

• Question 322:

  Which of the following is a description of a long OTC foreign currency option position?

  A. the obligation to buy one currency and to sell another currency at a predetermined price
  B. an option that uses IMM maturities
  C. an option dealt directly between two counterparties
  D. an interest rate protection instrument dealt on an exchange trading floor
  C. an option dealt directly between two counterparties

• Question 323:

  Which of the following are considered best practices?

  A. front office and back office should have different management reporting lines
  B. confirmation discrepancies should be investigated within 48 hours
  C. confirmations need only be exchanged via SWIFT if the amount involved is higher than USD 1,000,000.00 or equivalent
  D. money market and FX dealers should have different management reporting lines
  A. front office and back office should have different management reporting lines

• Question 324:

  How could you close out a futures contract?

  A. reverse and cash trade
  B. cash and carry
  C. reverse cash and carry
  D. offset
  D. offset

• Question 325:

  Which one of the following best describes the correct order of the settlements process?

  A. netting, trade entry, settlement, confirmation, nostro reconciliation
  B. confirmation, netting, trade entry, settlement, nostro reconciliation
  C. trade entry, confirmation, netting, settlement, nostro reconciliation
  D. trade entry, confirmation, settlement, nostro reconciliation, netting
  C. trade entry, confirmation, netting, settlement, nostro reconciliation

• Question 326:

  You have received the requisite notification from a non-swapping counterparty that their USD correspondent is to be changed from Bank A to Bank B taking effect from value date 15 June 2012. On 14 June 2012, you buy JPY 50 million from your counterparty against USD for value spot. Whom do you pay the USD?

  A. bank A
  B. bank B
  C. neither bank A nor bank B
  D. both bank A and bank B
  B. bank B

• Question 327:

  The owner of a convertible bond

  A. has the obligation to convert his bond
  B. has the right to convert his bond
  C. must wait for the decision of the issuer if he wants to convert his bond
  D. has the obligation to convert the coupon into a variable or a fixed rate
  B. has the right to convert his bond

• Question 328:

  If a bank incurs interest charges from having overdrawn an account due to a late payment from counterparty:

  A. The bank is entitled to seek reimbursement from the party responsible for the late payment.
  B. Nothing can be done to compensate the bank for the interest charges it incurs.
  C. The bank should file a complaint with ACI s Committee for Professionalism.
  D. The bank will automatically be reimbursed by the party responsible for the late payment.
  A. The bank is entitled to seek reimbursement from the party responsible for the late payment.

• Question 329:

  The use of netting in foreign exchange dealings has increased because it reduces:

  A. the volume of confirmations that have to be sent to the counterparties
  B. foreign exchange dealing limits and the currency risk exposure of the banks
  C. the potential foreign exchange trading losses incurred by banks
  D. interbank payments, counterparty credit risk exposure, as well as the amount of capital allocated to foreign exchange activity
  D. interbank payments, counterparty credit risk exposure, as well as the amount of capital allocated to foreign exchange activity

• Question 330:

  What does "modified following business day convention" mean?

  A. a convention whereby a transaction is dated the following business day, unless that day extends into the next month, in which case it is dated the preceding business day
  B. a convention whereby a transaction is dated the following business day
  C. a convention whereby a transaction is dated the preceding business day
  D. a convention whereby a transaction is dated the next business day that corresponds to the same numerical day of the month as the preceding payment
  A. a convention whereby a transaction is dated the following business day, unless that day extends into the next month, in which case it is dated the preceding business day