ACI 3I0-012 Online Practice Questions and Exam Preparation

ACI 3I0-012 Online Questions & Answers

• Question 211:

  What is a hedge?

  A. A means by which to reduce a risk
  B. An equal and opposite risk
  C. A riskless transaction
  D. A means of cancelling a deal
  A. A means by which to reduce a risk

• Question 212:

  For which country's currency is ZAR the ISO code?

  A. Saudi Arabia
  B. South Africa
  C. Zimbabwe
  D. Zambia
  B. South Africa

• Question 213:

  Which position below is NOT a component of common equity Tier 1 capital?

  A. innovative hybrid capital instruments with incentives to redeem
  B. common shares issued by bank
  C. retained earnings
  D. stock surplus (share premium)
  A. innovative hybrid capital instruments with incentives to redeem

• Question 214:

  Which of the following statements about Credit Default Swaps (CDS) is correct?

  A. CDS are used to recover funds from defaulted swap counterparties.
  B. CDS provide protection against specified credit events to the party receiving the CDS premium payments.
  C. CDS provide protection against the default of the trade counterparty that buys the CDS.
  D. CDS provide compensation to the protection buyer, should a specified credit event occur to a third party entity.
  D. CDS provide compensation to the protection buyer, should a specified credit event occur to a third party entity.

• Question 215:

  What is replacement cost a function of?

  A. Credit risk
  B. Market risk
  C. Both of the above
  D. None of the above
  A. Credit risk

• Question 216:

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

• Question 217:

  Which one of the following statements is true?

  A. Brokers should only show the names of banks to counterparties who have prime credit ratings.
  B. Brokers should only show the names of banks to counterparties who provide good liquidity to the brokered market.
  C. Brokers should only show the names of banks to counterparties whom they know well.
  D. Brokers should only show the names of bank counterparties if both sides display a serious intention to transact
  D. Brokers should only show the names of bank counterparties if both sides display a serious intention to transact

• Question 218:

  What happens when the issuer of a bond being used as collateral in a classic repo fails to pay a coupon on the bond during the term of the repo?

  A. The transaction is terminated and the collateral is returned to the seller
  B. The transaction is rolled over until the coupon is paid or the issuer becomes insolvent, at which point the seller becomes an unsecured creditor of the issuer
  C. The buyer is obliged to make a manufactured payment to the seller and becomes an unsecured creditor of the issuer
  D. The buyer is not obliged to make a manufactured payment to the seller but the buyer is likely to ask for margin
  D. The buyer is not obliged to make a manufactured payment to the seller but the buyer is likely to ask for margin

• Question 219:

  Today is Monday, 8th December. You sell a 9x12 USD FRA for value Thursday, 10th September next year. On what date is the settlement amount due to be paid or received (assuming that there are no holidays)?

  A. 8th September next year
  B. 10th September next year
  C. 8thDecembernextyear
  D. December next year
  B. 10th September next year

• Question 220:

  You and a dealer at another bank have a verbal bilateral reciprocal arrangement to quote each other two- way prices. During periods of high volatility, the other dealer refuses to quote to you. What does the Model Code say about this situation?

  A. The other dealer is bound to reciprocate.
  B. This is not in any way an enforceable or binding commitment.
  C. The Model Code does not comment on dealing reciprocity.
  D. It is common market practice to suspend reciprocity in periods of high volatility.
  B. This is not in any way an enforceable or binding commitment.