ACI 3I0-012 Online Practice Questions and Exam Preparation

ACI 3I0-012 Online Questions & Answers

• Question 31:

  Risk capital is intended to ensure that an institution can:

  A. Survive a liquidity crisis
  B. Absorb credit losses
  C. Absorb any type of unexpected loss
  D. Absorb any type of expected loss
  C. Absorb any type of unexpected loss

• Question 32:

  Repo is said to have "double indemnity" due to the creditworthiness of the counterparty and:

  A. A written legal agreement between the parties
  B. The oversight of the transaction by the custodian of the collateral
  C. The creditworthiness of the collateral
  D. The right of close-out and set-off in an event of default
  C. The creditworthiness of the collateral

• Question 33:

  A forward-forward loan creates an exposure to the risk of:

  A. Higher interest rates
  B. Lower interest rates
  C. Steepening yield curve
  D. Parallel shift downwards in the yield curve
  A. Higher interest rates

• Question 34:

  What is EONIA?

  A. Volume-weighted average overnight EUR deposit rate
  B. Volume-weighted average overnight EUR LIBOR
  C. Arithmetic average overnight EUR deposit rate
  D. ECB overnight lending rate
  A. Volume-weighted average overnight EUR deposit rate

• Question 35:

  According the Model Code, a principal, whose name has been rejected, feeling that the broker may have actually quoted a price or rate that it could not in fact substantiate, may:

  A. deduct points from the broker or adjust the brokerage bill accordingly
  B. in some centres, ask either the central bank or some other neutral body to investigate and confidentially verify that there was support for the original price or rate
  C. in some centres, ask the local ACI to investigate and confidentially verify that there was support for the original price or rate
  D. insist that the broker discloses the name of the other counterparty
  B. in some centres, ask either the central bank or some other neutral body to investigate and confidentially verify that there was support for the original price or rate

• Question 36:

  The Model Code recommends that standard terms and conditions be used in legal documents. Which one of the following statements is correct?

  A. When trading in financial products described by the Model Code, dealers and voice brokers need not clarify whether they propose to use standard terms.
  B. Standard terms and conditions should be signed bilaterally by senior management of both principals before any applicable market transactions are entered into.
  C. When using legal agreements any proposed modifications or choices offered in the agreement must be clearly stated as soon as the trade is agreed.
  D. For many instruments, standard master agreements issued by recognized authorities need not be signed by senior management of the principals intending to transact business.
  B. Standard terms and conditions should be signed bilaterally by senior management of both principals before any applicable market transactions are entered into.

• Question 37:

  The interest earned on a USD 5,000,000.oo money market deposit for 184 days is USD 12,500.00. What was the interest rate?

  A. 0.470%
  B. 0.196%
  C. 0.500%
  D. 0.169%
  D. 0.169%

• Question 38:

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

• Question 39:

  One or your brokers asks you to buy and sell EUP/USD at the same price net of brokerage in order to allow him to clear a transaction.

  A. You must have prior senior management approval.
  B. You must have the authority to switch names.
  C. You must execute such transactions as promptly as possible within policy guidelines
  D. All of the above.
  D. All of the above.

• Question 40:

  How long does the Model Code recommend that tapes and other records of dealers/brokers be kept?

  A. at least two months
  B. one year
  C. up to one month
  D. at least three months
  A. at least two months